The Ultimate Guide to Paying Off School Debt
Image by 3D Animation Production Company from Pixabay
Millions of people around the world want to advance their careers through higher education but having tuition debt is a concern. Luckily, there are some amazing programs and tools you can implement to get the degree you want to further your career without the concern of overwhelming debt. In this article, I will be telling you about the best ways to achieve your dreams in the most financially sound way possible.
Let’s Dive In
#1: Federal Student Loans
If you have already taken federal student loans you probably know that they come with some pros and cons. For example, often federal student loans offer very low-interest rates or partial subsidies because they are being given through a federal program. However, that still can create a decent amount of money to pay back.
Using tools like Saving For College gives you the opportunity to explore other options so you can refinance your loans to make lower payments and take advantage of your state’s plans.
Each state offers what is called a 529 plan. For example, in California, the TIAA-CREF offers a program for mutual funds and a program using indexed mutual funds.
Refinancing is a great option if you find a low-interest option that works for you.
#2: Different Tools and Calculators
If you are looking into refinancing or planning how much of a loan you would like to take and what your payback will look like, take advantage of the many tools and calculators available. Here are a few tools you can use right away:
- College Savings Calculator – this is a great tool to see how much money you need and what you can save as well
- Financial Aid Calculator – you may be surprised to find out how many financial aid options are available – free money means no payback!
- Saving and Borrowing Tool – smart money means knowing how to save and borrow with a plan in place
- 529 Funding calculator – this will help you navigate through the options you have from your state 529 programs
Each of these tools when used together along with other helpful calculators can help you as a student or the person responsible for tuition, a better idea to saving, planning, and payment options.
#3: Savings Plans
If you want to save the best way to start is understanding what you need and how much they cost. To do this you can easily create a spreadsheet like Google Sheets and add categories as they arise. Understanding that budgeting long-term like dieting doesn’t work but having a healthy spending plan with things you want balanced with things you need will allow you to save long term. Here are some examples of categories you should consider:
- Eating or drinking out
- Entertainment
- Home decor
- Cleaning products
- Groceries
- Travel expenses
- Clothing and Shoes
- Income
- Dedicated savings
As you can see there are many things we don’t think about that can easily add up. Getting a coffee out every day may seem cheap but that few dollars a day can be draining your cash. Also, finding ways to generate more income is critical. Being a student does not mean you can’t work. There are so many side jobs and online positions you can do that will help you build your resume and bring in money.