Millions of adults are burdened with large student loan balances and don’t know where to turn. The good news is this: there are numerous ways to decrease overwhelming loans and even get out of a portion of the obligation. Here are five common methods that people employ to chop down the grand total of money they owe from borrowing to finance their education:
Pay More Than the Required Monthly Amount
If your monthly budget allows, pay double or triple the required amount. Using this strategy for just a few years can give you breathing room to either go back to regular payments or eliminate the entire amount of the balance. Ask your lender about special programs that forgive a portion of the total if you agree to pay it off early. The federal government and some states will reward early payers by knocking off a percentage of the grand total you owe.
Refinancing is probably the most common, and most effective, way to reduce student loan obligations. In many cases, you can even get a more favorable interest rate on a refi package, which means you’ll actually save money in the long run. Refinancing for a longer period than the original term can mean much lower monthly payments and help bring a stressed budget back into shape.
Sell Extra Cars and Appliances
Many adults who are past their 30s and still struggling with education bills from years ago opt to sell a used car or borrow against their home to get rid of the lingering debt. This strategy only works for those who own homes or have extra assets lying around. But if you do have a car you can live without or a home you can borrow against, consider accessing some quick cash to take care of your indebtedness.
Apply for a Forgiveness Program
Many states have forgiveness programs that will let you write off a large chunk of your balance.Most programs will do so in exchange for your commitment to work in a particular school district, for a hospital or a designated non-profit agency. 1
Search for State Assistance Plans
You can qualify for financial relief just by living in a certain city or state, working in a particular profession or agreeing to teach in a special-needs school. Each state has its own programs so you’ll need to check with your state’s agency that oversees these programs. In many cases, you can qualify by simply working as a dentist, doctor or nurse. Most arrangements don’t call for you to do anything extra or spend a certain number of years in a specific trade. States set up assistance plans as an incentive for people to work in designated sectors of the economy. It’s possible to get about $15,000 of a typical student loan written off by getting into an assistance arrangement.