When Is It Time To Pay Off Student Loans?

The cost of education in America has gone up considerably in the past few decades and so too has the number of student loans college-bound young professionals must shoulder in order to afford it. Unfortunately, a college degree no longer guarantees graduates a job once they get out of school. As a result, a great many young people find themselves face to face with whopping debts that can take ten years or more to pay off.

The good news is that most student loans offer very good interest rates. There are also a number of online tools and resources, such as the Discover student loan calculator, which allow people to make their student loan situations more transparent and easier to understand. The bad news is that, unless you win the lottery, those student loans are still going to haunt you for a while, as few people, even ones with a salary, have thousands of dollars in disposable income. For those situations, you need to take practical steps toward paying off your student loans. Here's a quick but comprehensible game plan:

Contact your lender and try to defer or forebear your payments until you have a bigger income. If you're living off unemployment or minimum wage, as a surprising number of graduates are, most educational loan organizations will be understanding. Make a few small good faith payments just to put yourself on solid ground.

Pay off any credit card debts first. Interest rates on credit card balances are much higher than student loan interest rates. Plus, credit card debt contributes more adversely to your credit score than delinquent student loan payments.

Try to switch to graduated loan payments. Most lenders offer graduated payments that start off low and then increase every few years. This works well for students who are entering tough industries and may need time to build up their careers and salaries.

Look into consolidated loans. If you have a number of different loans, sometimes you can package them all together into a consolidated loan that has a lower interest rate. However, this may exclude the possibility of deferments and forbearances.

Paying off student loan debt is fast becoming one of the more uncomfortable financial discussions in America and the issue probably won't be going away anytime soon. Education is big business. Looking into the details of your student loans and coming up with a game plan can help you to deal with this and other forms of debt more easily.



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