Nowadays, student loan debt is the nation’s biggest financial concern. Rapidly rising student loan and the debt ceiling controversy make financial world in shocks. It will be the next ‘time bomb’ of the US, claiming by some expert about the student loan debt.
Because of loan debt many seniors, graduate, parents and undergraduates are deep involved. In order to escape from student loan debt they are desperately searching for the ways without getting any problem that will make their finance hurt more. If you are feel the same like them then keep reading because I will tell you 3 ways to make you free from student loan debt.
Being Frugal : One thing student must understand that is no one will give them free money to pay off their debt. They should make a plan to pay their debt. But many student think it the wrong way, to pay off the debt they borrow the money from credit card they have. That is really big mistake. They will make themselves in huge debt if they do not pay it on time.
There are only 2 option to save money. Cut off the expenses and getting more money to their pocket. Many people find difficulties to earn money more in this tough economy so that will happen to the student too. So they must cut off their expenses in other areas such as entertainment, clothes, books, lifestyle, etc
Many believe the bankruptcy will help them to eliminate the student loan. That is wrong. To manage these loans carefully the student should have a plan to generate more income somehow.
Consider about federal loans: Because of federal loans can not be remove through bankruptcy many people do not like it. But federal loans have offered protection that very few people aware about it such as forbearance, deferment, income based repayment plan, etc. Private student loan lenders are not offered such thing like that.
Federal student loan has low interest rate. In year of 2011-2012 the interest rate of the Stafford Loan is 3.4%. That is for the subsidized loans and for the unsubsidized the interest rate is 6.8%. You can opt for forbearance or any option offered by the federal loan if you have problem in making payments.
Only specific amount every year can be borrowed through federal student loan and that is the biggest drawback if you go college with expensive tuition. You must have several option. In the first year of college you can get $5500 and $6500 in the second year but there are maximum borrowing limits in third year which is $7500
In recent educational expenses that is not enough. Every year tuition fee is increases and the student can spend nearly $8000 in the first year of college. Because of the easy repayment option many student looks federal student loan highly. That is wrong, they should have others option. Private lenders are the best option for you. You should compare them in each aspect and choose what is suitable for you.
In order to get job faster after completing your college, you can do part time jobs, summer job and internships. That will help you increase your work experience as well as generate money to pay your debt.
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