Graduating from college is supposed to be a time of great joy and excitement, but this isn’t the case for all students. For many students, graduating from college sparks a realization that they now have to find a job and start paying off their student loan debt. Many young adults end up with thousands of dollars worth of debt that they end up paying for a good portion of their life.
You cannot simply stop paying on college loan debt that you owe or your credit will completely tank. Credit repair for student loans isn’t easy to do. If you know that you aren’t going to be able to pay your loan back as quickly as you’d like, use the following guide to learn what options are available when it comes to repayment of the loan and rebuilding your credit as quickly as possible.
Do Research About Student Debt Forgiveness
There are some colleges who are now forgiving some of the debt that students owe. Sullivan University, for example, just forgave nearly $2 million worth of loan debt that they are owed. There are stipulations to the debt forgiveness, though so you need to research the debt forgiveness options available to you and what the stipulations are for debt forgiveness. If you are able to have all or even some of the debt forgiven, it’ll greatly improve your credit overall because you will owe less money to debtors.
Educate Yourself About Government Policies Regarding Student Loan Debt
People know that there is a current student loan debt crisis that the country is facing. The government has taken notice and there are many policies that are being discussed on a regular basis that could impact how much you actually have to pay in the end for your loan debt. Many of the policies have a portion that lowers the amount of tax that has to be paid on the debt. Lowered taxes allow you to pay more of your money toward the principle amount that you owe. The sooner you can pay off the principle, the sooner you can be debt free.
Don’t File Taxes on Your Own
If you have student loan debt, you don’t want to file your own taxes because there may be deductions or changes that have been made in regard to student loan debt that you aren’t aware of. A tax professional can ensure that everything is accounted for and you’re able to get all of the deductions that you deserve. You need to provide your tax professional with the most current information regarding how much you have paid toward the loan and how much you still owe so that they can file everything for you properly.
Pay off the Debt as Quickly as You Can
Many young people don’t know the first thing about paying off loan debt because they’ve never had a loan in the past. When you have a loan, you can pay as much as you want above the minimum payment due toward the debt each month. The minimum payment due that you have to pay is just that, the minimum amount. It’s best to pay off your debt as quickly as you can so that you can reduce the overall amount you end up paying. Interest charges can be quite expensive and focusing on paying off the debt rather than buying things that you want but don’t need can reduce the amount of interest you actually pay for the loan. Pay as much toward the loan as you can to get out of debt as quickly as possible.
Avoid Taking Out Other Loans if You Can
When students graduate they sometimes make the mistake of assuming that they’re going to get a great job right away. It frequently takes quite a while to find a great job and many of the starter positions don’t pay extremely well. It’s best to avoid taking out a loan for a car, a home or anything else until you’ve paid off a good portion of the debt that you owe on your student loans. The interest rates that you’ll have to pay for a new loan will be very high if you still have a lot of student loan debt you’re paying off. This means you will pay more for the new loan than you really need to pay. By waiting a year or two and focusing all of your energy on lowering your student loan debt, you could make it easier to get an affordable loan in the future.
Don’t Miss Loan Payments
It’s important to make your student loan payments on time. Missing loan payments can cause your credit score to plummet and leave you with even more credit repair to do. If you find yourself falling on hard times, contact the lender and talk to them about what options are available to you. Some lenders will allow you to delay the payment by a few weeks or even a month if needed, while others may allow you to adjust the amount that you have to pay each month for a short period of time so that you can get back on your feet. Avoiding the company all together will cause you a lot of unnecessary hassle in the end.
Getting a great education can be well worth the investment that you have to make if you land your dream job and are making ample amounts of money to repay it. Most people aren’t able to repay their entire student loan debt within the first few years they’re out of college unless they win the lottery or inherit a large sum of money. Know that it will take many years before you’re going to be able to pay off the debt before you sign the paperwork for the loan. Create a game plan for how you’re going to repay it quickly and avoid spending frivolously along the way so that you can become debt free as quickly as possible.