Students Debt
College Student Debt in the U.S.
Higher education is a strange world. While it certainly holds great value for many students, we can never quite seem to agree on what the central purpose of college or other post-secondary education should be. Do we take such overwhelming levels of student debt primarily in as career preparation? Is it about learning to expand our minds, increase our ability to interact with others more meaningfully, or – for many of us – simply to survive away from home for the first time in our lives?
Whatever the goal, it had better be good, because we are drowning in student loan debt nationally. Nearly 45 million Americans are struggling to pay back over $1.6 trillion in student debt – an average student debt of nearly $37,000 per person. We owe more in college debt than we do for our homes overall. National student debt beats out credit cards, car payments, and even medical debt. It’s a subject debated in every election cycle and lamented in every home.
This doesn’t mean you shouldn’t go to college or pursue that two-year certification or whatever other post-high school education you believe is right for you. That’s a discussion for you to have with trusted friends and loved ones. It does mean you should take student loan debt into account when making your decision, and understand that school debt isn’t automatically affordable just because you graduate.
While you’re educating yourself in 18th Century British Literature, Organic Chemistry, or Coding for Game Development, take a little time to educate yourself in student debt and the ins and outs of student loan payment.
Read Your Student Debt Syllabus
When you’re first trying to get into college, or sign up for any other form of adult education, you have so many things to figure out that it can be a bit overwhelming. Where will you be accepted? Where will you choose once you are? Where will you live? What classes will you take? When will you move? What about roommates? Textbooks? Activity fees? Campus organizations? Personal connections? And how’s my hair?
It’s such a relief to be approved for those student loans that you sign whatever’s put in front of you. You’ll have years before you even have to think about it, right? Besides, by the time you graduate, you’ll probably be making enough that it won’t much matter what the specific terms are. Or maybe you’ll qualify for that student loan debt relief thing based on your chosen profession or where you agree to work for the first few years. Come on, college student debt is just a part of becoming an adult, right? At least my hair looks good, right?
Maybe. It’s at least a debate for another time. What’s less subject to legitimate argument is that before you know it, you’ve finished school. You have your certification, your degree, your new status as a thoroughly educated American. A few months later, the bills start coming due. Half the time we can’t even remember how much we borrowed or what we signed. Suddenly, those details all seem like a much bigger deal. Also, wasn’t I supposed to have a better job by now? What exactly am I going to do about my ed debt? And am I already losing my hair?
Getting Help With Student Loan Debt
The good news is, you have options. Don’t panic. You survived school – you’ll survive this. Every situation is different (yet another reason we should pay better attention to the paperwork), but in general there are several things you should do whether your student loan debt is $5,000 or $50,000.
First and foremost, gather your information. Pull out those forms. Keep those statements. Call the 800 numbers or pull up the websites if you need to. Do everything you can to figure out what you owe, who you owe it to, and on what terms they’re expecting you to pay it all back. This isn’t always as straightforward as it sounds. Even federally backed student loans sometimes utilize third-party lenders and government regulations are just fun for everyone.
Sometimes it turns out interest has been accruing even during part of the “grace period” before actual repayment began. Other times you discover you don’t actually qualify for those loan waivers you were so certain of when you signed up. Not every institution is communicative, and those that are don’t always have the most accurate information about your debt. And if you left school before completing your degree or certificate – well, all the rules go out the window and you expected to cough up major money, fast.
Take a breath and get yourself organized. Keep reading the small print and asking the questions until you have a good idea where things stand. Now, let’s talk options.
Getting Help With Student Loan Debt
The good news is, you have options. Don’t panic. You survived school – you’ll survive this. Every situation is different (yet another reason we should pay better attention to the paperwork), but in general there are several things you should do whether your student loan debt is $5,000 or $50,000.
First and foremost, gather your information. Pull out those forms. Keep those statements. Call the 800 numbers or pull up the websites if you need to. Do everything you can to figure out what you owe, who you owe it to, and on what terms they’re expecting you to pay it all back. This isn’t always as straightforward as it sounds. Even federally backed student loans sometimes utilize third-party lenders and government regulations are just fun for everyone.
Sometimes it turns out interest has been accruing even during part of the “grace period” before actual repayment began. Other times you discover you don’t actually qualify for those loan waivers you were so certain of when you signed up. Not every institution is communicative, and those that are don’t always have the most accurate information about your debt. And if you left school before completing your degree or certificate – well, all the rules go out the window and you expected to cough up major money, fast.
Take a breath and get yourself organized. Keep reading the small print and asking the questions until you have a good idea where things stand. Now, let’s talk options.
+ Option #1: Pay Off My Student Loans as Scheduled
Don’t overlook the obvious. Hopefully you’re already operating with a personal or household budget (if not, you should get on that before even finishing this article – don’t worry, it will still be here). Tighten your belt a bit, work hard, make good choices, and pay those bills. That’s not the guaranteed ticket to the American Dream that we once pretended it was, but that doesn’t mean it never works or even that it’s not a pretty good idea.
You’ve got your paperwork together, and hopefully you took a few basic math courses along the way. At this point, many of the same issues which arise with any other form of debt come into play. Use the resources available to you here at Debtry and across the Goalry family and research what makes an effective personal or household budget. Learn your basic financial terminology and the different types of loans. Understand the different ways to calculate interest and why they matter. Educate yourself about your credit report and how your credit score is compiled. Find out what experts say about smart choices when it’s time to finance a vehicle, purchase a washer and dryer, or consider taking on a mortgage.
We can also talk about online tools and useful apps to help you track and analyze your spending, your savings, your debt, your investments – or all of the above. Apps and online tools won’t make the important decisions for you, but they’re pretty good at alerting you to unexpected activity on your various accounts, categorizing your data and presenting it in useful ways, and offering real-time guidance about how you’re doing so you can make your own call about where to go next.
In the same way your fitness tracker can’t make you exercise, apps don’t do the work for you. What they do is help us keep focused on our priorities and think clearly about how our choices moment-to-moment impact those choices. They keep track of the tedious stuff so we can focus on enjoying the results.
+ Option #2: Request Help With Student Loan Debt From Original Providers
If your loans were managed and approved by the federal government (as many are), you have a “loan servicer” who manages the specifics on their behalf. These loan servicers are bound to follow the same basic regulations and offer flexible repayment options. Like ketchup and napkins in the drive-thru, however, they may not offer all on their own. You have to know that it’s there and you have to ask. Otherwise, they’ll assign a standard repayment schedule and send you the details. If you don’t renegotiate and fail to meet your obligations, things get complicated quickly.
Loan servicers can usually arrange payments on a sliding scale tied to your income. Keep in mind that as with any lender, they don’t make much money when you default because you can’t pay. Better to stretch things out and let that interest accrue while you keep paying, even if it’s not as much as they’d originally hoped. In some circumstances, they’ll set up a “deferment” or “forebearance” during which you don’t have to make any payments at all. Before you get too excited about this, keep in mind that your interest keeps adding up during this period just like it does the rest of the time.
There are advantages to working through your assigned loan servicer. For one, they’re not allowed to charge you fees for helping you out. Whatever advice or arrangements you make is gratis – no new fees for paperwork or “convenience charges” or any of that. If you qualify for Public Service Loan Forgiveness (PSLF), in which your loans are paid for in part or whole based on your willingness to accept specific jobs in high-needs locations, that arrangement is between you, the government, and your loan servicer.
(The PSLF program is on shaky ground these days as many students who were assured they were covered at the start of the agreement discover they no longer qualify for reasons no one can quite explain. It’s still worth looking into, however, for anyone paying off student loans. There’s nothing to lose by asking.)
It’s important to note that the various guarantees, loan forgiveness options, or deferment options in place when you signed off on the loan only remain in place as long as you’re working through your loan servicer. If you take advantage of student loan debt consolidation as part of an effort to take more effective control of your finances, any terms of the original loan disappear along with your old balance. You’re on brand new terms with a brand new lender at that point. The rules are whatever you sign up for the new loan.
+ Option #3: Take Charge Of Your Own Student Debt
Sticking to the original schedule or negotiating with your loan servicer aren’t the only two options you have for paying off student loans in full. For many graduates, the optimal method is to take charge of their student debt themselves and negotiate with lenders to work out a repayment system that works for them while building a strong credit history right out of the gate. Other students aren’t new to the “real world” at all, but have returned to school for additional degrees or specific certification. You may already know your way around a little when it comes to school debt and paying off student loans.
Because of this, you may be the best person to negotiate your own path to get out of student loan debt. That might include elements foreign to the baby-faced graduates of a generation ago. If your degree or certification is related to your profession, you may already be talking to the home office or other management about possible assistance with student debt. You may have preferred lenders you’ve worked with in other contexts, which today can include everything from local banks and credit unions to insurance companies, employer programs, local community groups, or specialized online lenders.
The proliferation of financial institutions both in brick-and-mortar locations and online means the lender marketplace is more competitive than ever. No longer are you condemned to put on your Sunday best and wait nervously outside someone’s office until they grant you an opportunity to petition them for a loan. While you certainly want to put your best foot forward, it’s not entirely up to you to win over lenders in the 21st century. More than ever, the pressures on them to persuade you to accept their services.
(Don’t feel badly for them; that’s how pretty much every other business has worked from the beginning. It’s only a handful of nightclubs, golf courses, and lending institutions who’ve managed to prosper over the centuries by expecting others to beg them for a chance to spend money in their establishment. Now it’s just those last few nightclubs.)
It’s possible that student loan debt consolidation could take you from drowning in student loan debt to paying off student loans in full sooner than you think. Consolidation doesn’t make your debt go away, but it can make it far more manageable by wrangling it all into a single loan, often on better terms and easier to keep track of.
The realities of the marketplace mean lenders are more competitive than ever, and that benefits you, the borrower. Whether it’s college debt, financing a car, paying off medical bills, or refinancing a mortgage, you have more options than ever. Online lenders in particular have shaken up the game considerably. Lacking the overhead and flash of brick-and-mortar institutions, online lenders are able to offer surprisingly competitive terms and interest rates, often with less paperwork and a shorter turnaround than traditional lenders.
You don’t get a sucker or a calendar out of the deal, but for what you’re likely to save going the online route, you can buy your own next time you’re out.
There’s more student debt than ever in the U.S. The good news is that there are also more possible answers than ever to “How do I pay off my student loans?”
Student Loan Debt Relief and Unified Finance
We have a guiding philosophy at Debtry and throughout the Goalry Unified Finance Mall. We believe that most of us are perfectly capable of taking more effective control of our personal or small business finances if we’re given the right information, the proper tools and connections, and a genuine opportunity. We believe that about you, in particular. You’ve already shown that you’re willing to invest time, energy, and resources into bettering yourself – stretching your mind and expanding your skills.
Use what you have and the information shared here and on other reputable financial sites. Knowledge is power, and while some forms of power corrupt, knowledge clarifies and expands what’s possible. Take advantage of our online tools and re-imagined financial apps. If you do decide that student loan debt consolidation or other specific services would be helpful, we can connect you with the lenders we believe are most likely to meet your needs.
Whether it’s student loans, real estate, budgets, savings, spending, debt, investments, or simply understanding it all, Debtry and the rest of the Goalry family are here to partner with you in navigating the madness. We can’t guarantee it will always be easy to get out of student loan debt or to accomplish your many other goals, but it doesn’t have to be as complicated as it too often seems. And you don’t have to do it alone.
Let us know where you’d like to start.
