Strategies to Pay Off Student Loans Your Financial Life Together
Student debt in the United States has jumped nearly 150 percent in the last decade to reach an all-time high of $1.4 trillion – with undergrads each owing an average of $40K each. That’s a harsh reality check for recent college grads, who thought that graduation meant a break from stress. In fact, according to a recent survey by SoFi, 83% of respondents shared that they could not relax due to the burden of their student loan debt with 50% reporting feeling anxious and/or depressed. The survey also showed that not only is causing recent grads to lose sleep (34%) it is also stopping over 42% from moving forward by putting off major life decisions like weddings, children or buying a home due to their debt.
Gearing up for the “real world” can be completely overwhelming, and according to Erin Lowry, a millennial financial expert and author of Broke Millennial, many millennials have a lack of financial knowledge to help them through the financial hurdles they face right after college – especially when it comes to tackling student loan debt. During the tour Erin will walk recent grads and not-so-recent grads through a 5 strategic steps to help them pay off their student loans.
KNOW WHAT YOU OWE: Believe it or not – most people don’t even know what they owe. Knowing what you owe and what your payments are is the first step to tackling your student loan.
LOAN TERMS: Many students have multiple loans from various institutions – all with different terms, payment schedules and interest – you need to understand these terms to know how much you will owe in the short and long term.
KNOW YOUR EARNING POTENTIAL: Consider your future earning potential when deciding how best to tackle your student loan debt. Taking time to consider your future earning potential can help you to avoid financial difficulties later on.
CONSIDER REFINANCING: For recent grads the 6-month grace period has come to an end – which makes this the perfect time to refinance those student loads. Refinancing is a great tool that can reduce your interest rate, consolidate loans and leaves you more available money to redirect to other financial goals. And, don’t worry it’s much easier than you think!
BUDGET & SAVE: While student loans are a looming debt for millennials, paying them off should not be the only financial goal of grads. There should be other long and short term goals from starting a 401K to purchasing Christmas gifts and from buying a home to taking a vacation. By creating a budget you can reduce debt and work towards all your financial goals.
Recently, I had the opportunity to talk with Erin Lowry regarding millennial debt. Check out the entire interview here: https://youtu.be/SWk9bRApiY8
MORE ABOUT ERIN
Erin Lowry is a millennial personal finance expert, speaker, and author of the book, “BROKE MILLENNIAL: Stop Scraping By and Get Your Financial Life Together.” The book is a step-by-step guide on how to go from flat-broke to financial badass. Lowry uses wry humor and hilarious true stories to keep readers entertained. She’s been featured by CNBC, CBS Sunday Morning, The Wall Street Journal, USA Today, Fox & Friends, Cosmopolitan Magazine, NBC News, New York Magazine, MarketplaceMoney, and U.S. News and World Report.
For more information, go to www.sofi.com.