Pay Off Student Loans by Keeping a Reasonable Balance When You Graduate in Four Years
Keeping a reasonable student loan balance requires an immense amount of planning, organization, and discipline, but you can do it. Some kids can’t pay off student loans because they are spending way too much time in college, going five or six years for a four-year degree. Some have to work more than expected, some drop classes, some feel they can’t get all of their classes, and some don’t force themselves to decide on a major course of study when it is time.
Organize yourself, and graduate in four years no matter what. If you want to do something else later, pay for it with cash after you start working, or use your employer tuition reimbursement plan some employers offer.
Some students drop classes, some feel they can’t get all of their classes, and some don’t force themselves to decide on a major course of study when it is time. Organize yourself, and graduate in four years no matter what. If you want to do something else later, pay for it with cash after you start working, or use your employer tuition reimbursement plan some employers offer.
The Nightmare Scenario of Getting Student Loans and No College Degree
It seems hard to believe that students are taking out thousands of dollars of student loans, and not getting the college degree that comes with it. But, that is happening all the time. I recently listened to a radio show where the host asked listeners to call in with their student loan balances and tell if they got their dream job. He got the surprise of his life when several people, calling in from all over the region said they had $50,000, $70,000 and even $100,000 in student loans, but left college with no degree.
They gave various reasons; some fell behind in grades and were asked to leave, some became ill and had to leave, some did not qualify for the last semester or year of student loans to finish their degree because they reached their maximum eligibility, some had to quit and work awhile and did not return.
There were many reasons. Here is the sad part, once the loans payments start if payments are not made you are sent to collections, when you are in collections you have to jump through hoops to qualify for financial aid again, so you can return to school. If you don’t pay your way out of collections and start making payments’, your student loan balance will increase exponentially every single year, due to added penalties’, including collection company fees and interest rates. Avoiding collections is the most encouraging reason you should pay off your student loans as soon as possible.
Pay Off School Loans as Early as Possible to Avoid Possible Catastrophic Events
If you can’t pay off student loans after your grace period is over because you don’t have a job in your field, you can apply for government help. You can get an Income Based Repayment Plan or IBR Plan set up by the federal government, created under the Obama Administration. When you are adequately employed your payments will return to normal. In addition to paying your school loans no matter what to protect your lifelong credit, think about paying them off early. Parent loans are not eligible. The bad part of the Income based repayment plan is that, your payments are so low they usually don’t cover most interest or principle. This causes your balance to balloon. I have had students tell me a balance went from $30,000 to $70,000 in a few years or even worse. This is one reason you should do everything in your powers to pay your full payment immediately, and extra to the principle will pay off your student loan early.
When you pay extra money to principle, you can pay off your loans early. Do your research with your school loan providers, and make sure you pay them off correctly and monitor your statements. Another way to bring down your loan balance is with the governments [service oriented repayment plan] if you work for a non-profit.
Get Debt-Free College by Knowing Your Options, Go Here
A Problem Many Students Don’t Discover Until After They Are Enrolled
Most financial aid packages at four-year colleges cover only 80% of costs for the poorest students as well as everyone else, an exception is a full scholarship that covers all income levels. Many poor and middle-income students don’t discover this fact until the end of their freshmen year.
Here is an actual example a college student gave me: a young man was told his college would cost $13,000.00 for the year, all but $2500.00 was covered by his financial aid package, he wasn’t told about this gap in financial aid until the end of his first year. His single mom had no money to help him.
He was asked not to come back until he could pay the $2500.00 balance. They told him the computer would not allow him to register. Another case, that was taken up by a local senator, is that of a young girl who took out $55,000.00 in school loans, she was told that was her maximum, and needed to find another way to pay for her last year and get a degree. She informed them that she had no other way. You can find out how difficult it can be to repay student loans by reading about it at the Student Loan Justice site.
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Lois Center-Shabazz | Course Delta Agency
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