Business
I had the pleasure of speaking to Andrew Pentiss a senior writer for Student Loan Hero. Andrew and I spoke about how to pay off and avoid student loans. Part of the problem is the poor education on student loan borrowing for college. I remember when I went to college there wasn’t a discussion with the financial aid office about how to pay off my student loans. Instead the only conversation was how to finance and pay for my education. Also the cost of education is increasing over time. I read an article that has shown a ten fold increase in the last decade. Part of this increase has been to pay for the additional cost of administrative staff instead of paying for teaching or research staff. There has been an increase in the amount of adjunct staff. This has lead to an increase in the profitability of the college business model. It’s important for you to look at the cost of education before you get into it. There are a few alternatives to returning to college or going to college in the first place. You could go into an apprenticeship in a skilled trade for instance. According to the bureau of labor statistics Bureau of Labor Statistics electricians make $56,180 per year on average. There are also tech boot camps which allow you to be able to pick up the skills that you need to be hired as a web designer, programmer or a graphic designer. These types of jobs can have starting salaries of $60,000+. There are several different types of payoff methods for student loans. The method that is popularized by Dave Ramsey is the Debt Snow Ball Method. The point of the debt snowball method is to list all of your debts smallest to largest and then pay off the smallest then to work on the next largest. After doing this you will be able to slowly and steadily increase the amount of debt you are paying off. The debt avalanche method is a different method for paying off your student loans and other debts. With the debt avalanche method you list your debts in order of highest interest to lowest interest. Then you begin to pay off your debts with the highest interest first. There are also a couple of different types of forgiveness programs for student loans. If you work at a non profit for 10 years and make consecutive payments then you can have some of your student loans forgiven. For more specifics on this you can go to the link here Student Aid. The other type of loan forgiveness is public loan forgiveness for a particular type of profession. Student loan hero provides excellent examples of student loan forgiveness like this one for attorneys. One of the most underrated forms of repayment is to repay it while you’re attending college. Even $50 a week can be hugely impactful. If you took out $10,000 in student loans at 6.2% accruing interest in 4 years you would have $46,596.46 owed by the time you graduated. If you paid $50 a week each week over those 4 years your total owed would be $40,892.57. The difference owed would be $5,703.89 in savings in interest. The best ways to avoid student loans are tried true and probably beaten to death. Apply for all of the financial aid that you can. If you’re not in college currently try to save as much as you can even if it’s just with a part time job. If you want to learn more about avoiding student loans or how to pay them off you can go to Student Loan Hero.