Student Debt Soars: 5 Ways to Pay Off Your Loans Faster

Student loan debt has reached a new record high, with college grads of every age bearing this burden. Here are five tricks to pay off college loans sooner.

Student Debt Soars: 5 Ways to Pay Off Your Loans Faster Photo by WAYHOME studio / Shutterstock.com

Student loan debt in the U.S. has reached a new all-time high of $1.4 trillion.

That reflects an increase of more than $833 billion — 149 percent — since 2007, according to a recent analysis by Experian. Student loans constitute the fastest-growing type of debt.

Just about the only good news from Experian’s findings is that late payments have decreased by 10.1 percent since 2009, the year the Great Recession officially ended.

Michele Raneri, Experian’s vice president of analytics, attributes rising student loan balances to the increasing cost of higher education. She continues:

“Even with this number moving upward, the data is showing a decrease of delinquencies, which means that consumers are managing their loan payments better than they have in the past.”

Other findings from Experian’s analysis include:

  • 13.4 percent of U.S. consumers, spanning from the Silent Generation to Generation Z, have at least one student loan on file.
  • The average total student loan balance is $34,144.
  • The average number of student loans per person is 3.7.
  • Consumers with student loans have an average VantageScore credit score that is 25 points lower than the national average of 675. Experian did not address FICO credit scores.

Tackling student loan debt

Perhaps the best way to minimize student loan debt is to do everything you can to reduce the cost of college before taking out loans. Of course, that’s little help to the millions of Americans already collectively carrying that $1.4 trillion in student loan debt.

Still, there is a lot you can do to pay down your share of that debt faster, including the following:

1. Know your loans. A 2016 LendEDU study found that few students know the basics of their own loans. For example, only 7.9 percent of the students surveyed knew their current interest rates, and only 6.1 percent knew their repayment terms. Only about 4 percent knew that student loan refinancing was an option after graduation.

2. Track your finances. Millennial Richard Meadows paid off his student loans by his mid-20s in part by tracking his net worth every month. You could start by simply tracking how much money you earn and spend each month. If you don’t track those basics, you could be spending more than you make without realizing it — no way to fast-track debt repayment.

3. Ask for forgiveness. As Money Talks News founder Stacy Johnson details in “Ask Stacy: Can I Have My Student Loans Forgiven?” some folks may be able to have their loans forgiven, discharged or canceled. The options are greater with government loans than private loans.

4. Talk to your employer — or find a new one. A small but growing number of companies help their employees pay off student loans. Fidelity Investments, for example, joined their ranks last year by launching a student loan assistance program that puts $2,000 toward eligible employees’ student loans each year, up to a total of $10,000.

5. Seek professional help. If you feel overwhelmed by debt, consider calling a debt management expert. A reputable expert may be able to help you by lowering your interest rates, finding forgiveness programs and stopping wage garnishment and tax liens.

What’s your take on America’s soaring student loan debt? Sound off below or on our Facebook page.

Trending Stories

Comments

1,656 Active Deals

More Deals