Student Debt: Understanding Your Options
Living the post-college lifestyle you’re supposed to dream of is expensive. Want to get a home? Get married? Have kids? Those are all a long way off. It is simply impractical to do any of these things without paying off or alleviating your student debt.
The monk-like lifestyle
Okay, so maybe “living like a monk” might be taking it too far. But one of the most important ways of saving large amounts of money is to live much more frugally. We forget how expensive modern life can be. A train ticket there, a film ticket there; some candy here, a music concert there. They don’t seem like big money sinks at first, but they all add up.
Sorry to have to say this, but cutting down on luxury purchases is what you’ll have to do here. I know that the luxury lifestyle was probably what you went to college to achieve, but it can’t be lived as soon as you get out. Save as much money as you can and work at it gradually.
Volunteer work
It’s possible to help those in need and pay back your loans at the same time. There are organizations out there who provide money towards your student loan debts in exchange for your time. These include the Volunteers In Service To America, the Peace Corps and Teach for America.
There is also SponsorChange, which allows you to specify causes and job categories that will suit you best. Web design, fundraising and strategic development are all options. These arrangements are a type of loan forgiveness, about which more will be said below.
Debt consolidation
Students don’t always get their loans from one place. In fact, most students in America have several loans. Sometimes, they have a mixture of loans with both federal parties and private ones. Owing several debts to several institutes means more interest rates, which in the long term is going to cost you more money.
One option that may be available to you is student loan consolidation. This takes all your federal loans and combines (or consolidates) them all into one debt with a single interest rate. This can save you some money, but it's mostly beneficial in other ways. For example, by having just one consolidated debt instead of several, you will have more options when it comes to repayment or relief plans.
Loan forgiveness
Student loan forgiveness can take many forms. The most common takes the form of a public service career. Let’s say you went to college and got yourself qualified to teach or work in healthcare. You can make that degree of yours work towards loan repayment through a ‘forgiveness’ program.
Many low-income areas or rural communities lack in specific professions. Loan forgiveness may be offered to recent graduates willing to work in that area. Teachers, firefighters, doctors, lawyers, law enforcement - many of the most socially-important professions. There will be a contract you must sign and adhere to. You must pay attention to the contractual stipulations carefully, lest you lose the debt assistance.
