In order to get rid of student loans, you need to take some major steps. Luckily, it is easier than you may think!
In this article, I will discuss 10 ways to get rid of student loans that you can start today, so your student loans will be gone in no time! If you follow these steps carefully and don’t give up, you can learn how to get rid of student debts and finally start planning your future instead of paying off your past.
How to Get Rid of Student Loans
1. Track your spending
Track your spending. This may sound like a daunting task, but it is the best way to identify where your money is going and find ways to save.
Keep a log or spreadsheet with columns for what you’re spending money on, when you’re spending it, and how much you spent each day. At the end of each week or month, review your spreadsheet and try coming up with ways to cut back on certain expenses so that you can free up more cash for paying off student loans.
SEE ALSO: 8 Reasons to Never Take Out a Loan Again
2. Establish a plan
If you’re feeling like you’re drowning in debt, it’s important that you know the different ways there are for students to get rid of loans. Here are ways that can help.
- Consolidate your student loans with a federal Direct Consolidation Loan.
- Apply for the Public Service Loan Forgiveness Program (PSLF) which offers student loan forgiveness after 120 qualifying payments if you work in public service and meet certain requirements.
- Switch from an unsubsidized Stafford loan to an income-driven repayment plan.
- Explore working abroad or going on a sabbatical for at least one year during which time you will not be required to make any payments on your loans.
- Refinance student loans with a private lender such as SoFi.
- Convert from Subsidized Stafford Loan or Grad PLUS Loan into Direct Unsubsidized Loans
- Consider refinancing Federal Perkins Loans.
3. Reach out to family members
Talk to your parents and grandparents about your financial situation. They might have some savings that can help you get started with a new career, or they might be able to offer some advice on how you can cut back on other expenses.
If you are lucky enough to have a family who is financially stable, they may be able to help you out in the short-term while you figure out what else needs to happen.
Some families will even give you an interest-free loan for tuition and books for this semester so that you don’t have to take out student loans. The money doesn’t need to be repaid until after graduation day.
4. Play the credit card game
This is a game that you can play with a friend or on your own. The goal is to get rid of your credit card debts. First, take out all of your credit cards and lay them in front of you.
decide who will be the banker. Third, the banker writes down how much they owe on their credit cards in the first column.
Each time they want to borrow money from the bank they must write it down in the second column. As soon as one person has repaid their debt then the other player becomes the banker until they too have repaid their debt. Sixth, whoever has zero debts at the end wins!
5. Find side hustles you enjoy
The best way to get rid of student loans is to start a side hustle that you enjoy doing and can turn into a full-time gig. Side hustles can be anything from selling on eBay or Etsy, freelancing, starting a blog, or creating your own product.
No matter what it is, it has the potential to turn into something more lucrative than your day job if you work hard enough. Even if you only make $100 extra per month off of a side hustle, it will help pay off those pesky student loans faster than before!
6. Use Cash Back Credit Cards Wisely
One way to pay off your student loans is by using cash back credit cards wisely. When you use a cash back credit card, the issuer will provide you with a percentage of the money you spend back in rewards.
Essentially, this means that for every cash spent using your card, you’ll get a certain amount in return (usually around 1-2% depending on the card). This is often an excellent way to save money and cut down on debt at the same time.
7. Reconsider Private Student Loans
Private student loans can be one way to pay off your college debt, but they are not always the best option. There is no limit on how much you can borrow from a private lender, but interest rates are typically higher than federal loans and often have more stringent repayment terms.
Private lenders also do not offer some of the options that federal loan programs have, like income-driven repayment plans and deferment for economic hardship.
8. Consolidate Your Debt
One of the best ways you can get rid of your student debts is to consolidate them. Consolidating your debt means that you’re combining all your different types of debt into one loan with one monthly payment.
This will make it easier for you to manage them because they’re all in one place, and you’ll be able to pay off the loan sooner than if they were separate.
9. Keep Working After College
it is time to start thinking about what is next. What do you want your life to look like in 5, 10 or 20 years? If your answer includes living a debt-free lifestyle, then it’s time for you to take the necessary steps and get started.
10. Use Bankruptcy as a Last Resort
If you have no other alternative, bankruptcy may be a way to get rid of your student loans. It is an extreme measure and should not be taken lightly.
Bankruptcy can lead to a bad credit score, which will affect your ability to buy homes and cars in the future. If you are considering bankruptcy as a way out, consider that it will wipe out all of your assets including retirement accounts and college savings plans. That is why it is important to exhaust all other options first before filing for bankruptcy.
It feels good when you do not owe anyone, group or government. It is best never to go in to debt in the first place than going into a debt you may not be able to repay, especially as a student. Get rid of students loan debts, you need to apply different methods as outlined above.