student loan debt

Biden Moving Ahead on Student Loan Forgiveness

April 11, 2021 By Max Erkiletian Leave a Comment

One of the planks in President Joe Biden’s election campaign called for student loan debt forgiveness. Now, it seems the talk is turning to action.

The president signed an executive order extending a pause of student federal loan payments on his first day in office. Previously he expressed doubt he could cancel student loan debt on his own. However, with an evenly divided Senate, he is examining non-legislative options.

An Executive Order

Last week, Biden asked Education Secretary Miguel Cardona to determine if the president can use an executive order to wipe out student loan debt. Cardona’s report is due any day.

During the 2020 presidential campaign, Sen. Elizabeth Warren D-Mass. pledged to forgive student loans. She also produced a report by three Harvard Law professors supporting the idea that student loans could be dismissed through executive action.

What’s the Problem

Over 44 million Americans owe almost $1.7 trillion in student loan debt, according to a report by the Consumer Finance Protection Bureau.

Sixty-two percent of students graduating from college in 2019 carried an average student loan debt of $28,950, according to the Institute for College Access and Success (TICAS). Loan debt in 2019 was about one percent lower than the 2018 figure of $29,200.

“After years of declines in state funding driving greater student debt, the recent leveling out of student debt shows the value of investments in higher education,” notes Debbie Cochrane, executive vice president of TICAS. “However, neither state investment nor student debt levels have recovered from the Great Recession, and the COVID-19 pandemic risks putting any progress in jeopardy. Students and families are looking to federal and state policymakers to do the hard work needed to prevent student debts from rising quickly again.”

It’s Not Getting Any Better

The cost of a college education has risen steadily over the last two decades. Many students can not get a degree without financial help.

Tuition and other fees have increased more than $5,000 at public colleges and over $13,000 at private institutions, according to a report by College Board. Those figures are adjusted for inflation.

The College Board study determined that a freshman entering college last fall averaged $14,850 in tuition, fees, and board. That does not include the cost of textbooks, transportation, and related costs. First-year students at private schools paid an average of $29,110.

Financial Burden for Students and Parents

“Between parents helping their kids finance college and students taking out their own loans to attend school, every generation is saddled with a considerable amount of student loan debt,” states an Experian report. “Millennials carry much of this burden and have one of the highest student loan balances of any generation.”

Experian, an international credit reporting company, found that people between 23 and 34 carried an average student loan balance of $34,504.

The X Factor

Generation X (ages 40-55) has the most student loan debt of any group. Their loan balance grew 13 percent in 2020, according to Experian. The average balance for that age group stands at $45,095. That is a $5,114 increase.

“When analyzing how federal student loan debt is distributed across generations, it may be striking that middle-aged consumers carry more debt than those near college age,” noted the Experian report. “One possible explanation is the use of federal Parent PLUS loans, which allow parents to take on student debt for their children.”

About 3.6 million parents now owe $96 million on PLUS loans, according to a study by Trellis Company. Trellis assists people trying to repay student debt.

A Middle-Class Burden

Some critics of student loan forgiveness argue that it would benefit high-income earners more than others. However, a Dartmouth College study determined middle-income families bear most of the burden.

“Children from middle-income families make too much money to qualify for student aid packages, but they do not have the financial means to cover the costs of college,” Professor Jason Houle wrote of his research. “The study found that students from families earning between $40,000 to $59,000 per year racked up 60 percent more debt than lower-income students and 280 percent more than their peers whose families earned between $100,000 and $149,000 per year. A similar trend held for more affluent middle-income families earning up to $99,000 annually.”

How Much to Forgive

Biden initially said he favored forgiving $10,000 for each student loan borrower but is now considering raising that to $50,000.

Canceling $50,000 of student debt per borrower would eliminate student loan debt for 36 million people. That is about 80 percent of all student loan borrowers, according to Mark Kantrowitz, publisher of Savingforcollege.com.

What Should You Do

If you have a private loan, keep paying as usual. The forgiveness plans are only for federal loans.

You do not have to do anything if you have a federal student loan. No payments are due and no interest will accumulate until Sept. 30, 2021. However, you might want to stash the monthly payment you would make on your loan in an interest-bearing liquid account until that time. That way, if you have to start paying on your loan again, you will have a lump sum to knock down your costs.

Summary

Student loan forgiveness is building momentum. Members of Congress and interest groups are lending their support. A recent Harris Poll shows overwhelming support for loan forgiveness and reform.

We may be looking at an inevitability.

P.S. If you need to know more about student loan debt, just ask John Oliver.

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The Weekend Wrap: Financial Education, Student Loans, Recovery, Jobs, and a Crypto IPO

April 10, 2021 By Max Erkiletian Leave a Comment

With all the emphasis on stimulus checks, you might have missed some of the personal financial changes in the American Recover Plan. You might also want to know where the job market is heading; what is planned for student loan debt; the push for financial education; and a first in an IPO.

Efforts to Require Financial Education Rising

You can see Americans at international sporting events and political gatherings shouting: “U.S.A, U.S.A.” and “We’re number one!” However, you don’t see proud parents and grandparents outside schools chanting, “We’re number 14!”

America’s Financial Literacy Declining

Fourteen is significant because that is where the nation ranks globally in financial literacy. In fact, only 57 percent of Americans are financially literate, according to a Standard & Poor’s Survey.

American’s lack of financial knowledge has spurred an increasing number of states to mandate financial education in schools. Today, 21 states require personal finance to be taught in high school. That is an increase of four states since 2018. Florida dropped its financial education requirement but retained a personal finance elective.

To make matters worse, financial literacy is declining. Only 34 percent of Americans correctly answered four out of five personal finance questions in a 2018 Financial Industry Regulatory Authority (FINRA) survey. That is down eight percent from 2009.

Economic Divide

Students from low-income families suffer the most. The Council for Economic Education is a non-profit that promotes financial education. It found that in states without mandatory financial education, poor students had much less access to financial information than wealthier students.

Research from a University of Montana study indicates students who have had financial education in high school make better financial decisions. That research shows those students incur less educational and personal debt.

Student Loan Forgiveness

Up next, we are going to look at some of the lesser-known elements of the relief plan enacted last month. But first, let’s take a look at provisions for something that was left out of the law.

Student loan forgiveness was not included in the American Rescue Plan. However, section 9675 of the law makes student loan forgiveness tax-free from 2021 to 2025.

That is great, you say. But if my student loan can not be forgiven, what’s the big deal?

The big deal is this. Making student loan forgiveness tax-free is the first step to obtaining loan forgiveness. It is the horse that must come before the cart. Now that it is in place, what’s next?

Sunday’s edition of Saving Advice will examine the latest in the push for Student Loan Forgiveness.

More Than a Stimulus Check

Everyone knows that the American Rescue Plan Act signed into law by President Joe Biden last month gave most Americans a stimulus check. But you may not know some of the other aid it offers. Here is a brief rundown.

Child Tax Credit Increase

The main takeaway here is that this tax credit has been increased from $2,000 to $3,600 for each child under six and to $3,000 for each child between six and 18. The benefit is available for couples making under $150,000 a year or single parents making under $112,500.

Another significant change is that the child tax credit will be sent directly to families on a monthly basis. Previously, parents had to wait until their tax refund came through to get the money.

“This change will allow struggling families to receive financial assistance now,” according to the treasury department, “rather than waiting until the 2022 tax filing season to receive the Child Tax Credit benefit.”

Schools and Childcare Block Grants

The law designates $130 billion to reduce class sizes, improve ventilation, purchase personal protection equipment, and other measures to help schools K-12 open safely. Another $40 billion is set aside for childcare providers and $1 billion for Head Start.

College students will have access to $40 billion in emergency financial aid.

Homeowners and Renters

The moratorium on evictions and foreclosure ended March 31. The law does not extend that ban. However, it does provide funds to help you keep a roof over your head and keep the lights on.

The law provides $10 billion in aid to homeowners and another $21.6 billion for renters.

You can access funds through your state, territory, or tribal government to make delinquent mortgage payments. State, territorial and local governments will also handle the money targeted for rent and utility payments.

Unemployment and COBRA

Unemployment benefits of $300 a month will be paid through Sept. 6, 2021. That is $100 less than originally proposed. However, a surprise tax benefit makes the $300 plan more advantageous.

The first $10,200 in unemployment is paid tax-free. In addition, if you paid taxes on unemployment benefits in 2020 you will be able to recover those funds when you file your 2020 tax return.

COBRA gets a full subsidy. That allows you to stay on your employer’s health plan through the end of September.

Food Aid

The Supplemental Nutrition Assistance Program (SNAP) gets an increase through Sept. 30. Just over $2 billion will go toward nutrition assistance. Another $490 million will go to increase cash vouchers in the Women, Infants, and Children (WIC) program.

Aid for Businesses

Businesses get $7.25 billion to cover payroll and other expenses as part of a boost in the Payroll Protection Plan (PPP). One change is that non-profits are now included in PPP.

Restaurants and bars get extra help. $25 billion is provided to cover payroll, utilities, rents, and other operating expenses.

Public Health and Safety

You may not see it in your personal finances. But state and local governments have incurred more expenses as a result of the pandemic. They have also lost tax revenue.

To help, the law allocates $350 billion dollars to state, territorial, and tribal governments.

“In addition to helping these governments address the revenue losses they have experienced as a result of the crisis,” according to the treasury department, “it will help them cover the costs incurred due to responding to the public health emergency and provide support for a recovery.”

The New Job Market

With Unemployment dropping to 6 percent, you may be tuning up your resume. New jobs are opening whether you are reentering the workforce or you are making a career change.

The post-COVID employment picture will look a little different than it did before. For instance, most economists were surprised that 110,000 new construction positions were part of the 916,000 jobs added to the economy last month.

In addition, the Biden Administration has proposed a massive infrastructure plan that could add all sorts of jobs in various fields.

Health, Tech, and Green

Most employment for 2021 and beyond will be in technical, medical, and green jobs, according to the U. S. Department of Labor. Among the top ten jobs, Labor includes in its list of the fastest-growing occupations, six or in the health field. The other four are wind turbine service technicians, solar installers, statisticians, and information security analysts.

A serious shortage of skills in fast-growing fields was emerging prior to the pandemic according to an American Action Forum (AAF) report. As the economy reopens, that shortage will rise again.

“This study estimates that, over the next decade, employers in nearly every state will face significant shortages both of workers with an associate degree or some college,” wrote AAF analysis Tom Lee in 2019.

FYI on IPO for Coinbase

Mark your calendar for April 14. That day history will be made.

Coinbase Global, the largest cryptocurrency exchange in the United States, will go public next Wednesday. It is the first major crypto company to launch an IPO.

Trading on the Nasdaq, Bitcoin will be listed under the symbol COIN. However, the company will not follow the traditional IPO route. Instead, current investors will convert 114.9 million shares for offer to the public. That practice is known as a direct offering.

We will follow up on Coinbase in next weeks The Wrap

Coinbase Offering Price

Coinbase plans to announce its reference or opening price the day before it goes public.

The company released a flush earnings report Tuesday. It announced 2021 first-quarter earnings exceeded earnings for all of 2020. Revenue of $1.8 billion produced earnings of between $730 million and $800 million in the first three months of the year, according to the Coinbase report.

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What Does The Average Millennial Debt Look Like?

April 17, 2020 By Tamila McDonald 2 Comments

Financially, most Millennials – those born between 1981 and 1996 – are behind. On average, they earn just over $35,500 a year, and their net worth is a mere $8,000. Debt plays a big role in the low net worth numbers. And, since incomes aren’t increasing at rates similar to what Baby Boomers and Gen Xers saw, many are struggling to keep up. If you are wondering what the debt picture looks like, here’s what you need to know about the average Millennial Debt.

Millennial Debt Total

According to data from the Federal Reserve, Millennials owe more than $1 trillion in debt, in total. That’s across all debt-related categories, including credit cards, mortgage, and other kinds of loans.

Student loan debt for Millennials – the total of what’s owed by approximately 43 million Millennial borrowers – far outpaces previous generations in that category. It’s over 300 percent greater than what Gen X deals with, for example.

However, Millennials tend to have less in credit card and mortgage debt than Gen X. The lack of mortgage debt is partially a sign of the difficulty the generation has when it comes to entering the housing market. As for credit card debt, it’s a byproduct of Millennials’ general aversion to debt.

Credit Card Debt

Often, credit card debt usually comes with higher interest rates than many other types of debt. While Millennials are more debt-averse than different generations when it comes to credit cards, their balances have been rising. Over the course of one year, the average balance grew by 7 percent. As for the average balance, that hit $4,712.

Older Millennials tend to have higher credit card balances than their younger cohorts. For those who turn 39 in 2020 (the oldest Millennials), their average balance was $6,675. The youngest Millennials – anyone turning 24 in 2020 – come in at $2,288 on average.

Mortgage Debt

While many Millennials haven’t been able to buy homes, a decent number of their brethren scooped up properties. On average, Millennials with mortgages owed about $222,211 in Q1 2019. That’s a 5 percent increase over the previous year’s average.

Millennials are outpaced by Gen X when it comes to the average. Gen Xers came in at $237,753 on average. However, Millennials averages are growing faster than nearly every other generation. The only exception is Gen Z, which has a 15 percent growth rate. However, Gen Z had a lower average balance, sitting at $138,193.

Auto Loan Debt

For auto loans, Millennials have the fastest growth of any generation. On average, they owe $18,201 (as of Q2 2019), representing a 28 percent increase in just a seven-year period.

Gen Z does come in with a lower auto debt average, sitting at $14,272. However, both Gen X and Baby Boomers have higher averages, coming in at $21,570 and $18,759, respectfully.

New vehicle prices have mainly been growing. On average, a light vehicle (car, SUV, non-commercial trucks and vans, and other commuter-style four-wheeled vehicles) cost $38,948. As prices rise, loan sizes tend to follow.

Student Loan Debt

Student loan debt has been a shackle for many Millennials. The cost of college is over twice what it was in 1980, and Millennials have largely been told that getting a degree is either the key to success or an outright necessity.

The total amount of student loan debt has already crested $1.6 trillion. During Q2 2019, borrowers between 25 and 34 years of age (a large portion of Millennial graduates) owed an average of about $33,000 in student loan debt.

Ultimately, Millennials often have substantial debt loads and are often financially hindered by their student loans. However, they certainly aren’t the only generation battling against debt.

Do you think debt Millenial debt is holding you back? Do you have any tips that can help Millennials conquer their debt? Share your thoughts in the comments below.

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Can Senator Warren Really Really Wipe Out $640 Billion in Student Loan Debt?

May 9, 2019 By Tamila McDonald Leave a Comment

As April 2019 drew to a close, Senator Elizabeth Warren revealed an ambitious plan to help American families overcome student loan debt. If the plan was implemented, about 75 percent of Americans with student loans would see their debt vanish. For another 20 percent, at least some of their student loan obligation would disappear. But can Senator Warren really pull it off?

Senator Warren’s Student Debt Cancellation Plan

Senator Warren – who is also campaigning to be the next president of the United States – has a bold plan for tackling the student debt crisis in the United States. She wants to cancel up to $50,000 in student loan debt for any American household earning up to $100,000 a year. For approximately 75 percent of student loans holders in the U.S., that would mean cancellation of all of their remaining student loan debt.

However, 95 percent would at least get some degree of relief. If a household earning less than $100,000 had over $50,000 in debt, the plan would dismiss at least $50,000. For example, if a qualifying family had $65,000 in student debt, only $15,000 would remain after $50,000 worth was canceled through Senator Warren’s plan.

Additionally, partial debt cancellation for households that earn between $100,000 and $250,000 a year would also be available. The value of the cancellation would decrease by $1 for every $3 earned over $100,000. For example, households with incomes of $160,000 would get $30,000 of their student debt canceled. At the $190,000 annual income mark, the family would see $20,000 of their student loan debt wiped away.

Households with federal student loans wouldn’t even have to take action. Since the government has access to their loan and income data, it could be handled without the family having to take any steps. Private student loan debt would also be eligible in the plan, but the government would need to work with borrowers to get the loan details and coordinate the debt elimination with the lenders.

Many lower- and middle-class families struggling with student debt would get some relief, especially since the debt elimination wouldn’t be taxed as income. Senator Warren equated the plan to “an enormous middle-class stimulus that will boost economic growth.” And she didn’t stop there. If her plan was implemented, about 42 million Americans would at least get partial relief from their student loan debt.

Senator Warren’s Free College Plan

Another part of Senator Warren’s policy that could have a massive impact on American families is her plan for universal free college. She wants to make two- and four-year public colleges available without any tuition or fees, significantly limiting how much a person would have to spend while pursuing higher education.

While that plan might not bring the cost of college to zero – as it does not address other expenses like room and board or supplies – to say it would make a substantial difference would likely be considered an understatement.

The Drive for College Degrees

Many Americans believe that a college education is critical for their future success. One 2012 Pew study showed that 94 percent of parents with children under the age of 17 expected their kid to go to college.

Additionally, it is widely known that individuals with college degrees generally earn more than those who stop going to school after receiving their high school diploma. Those who have a four-year degree earn about 26 percent more than those with two-year degrees and college graduates bring in 56 percent more than high school graduates.

Employers are also increasingly seeking out workers with college degrees. One study by Georgetown indicated that 65 percent of jobs in the US would require at least some level of higher education by 2020.

Paying for Senator Warren’s Plan

Most who oppose Senator Warren’s plan first point to the price tag, which is estimated at $1.25 trillion over 10 years for both the debt elimination ($640 billion) and universal free college components. To put it simply, eliminating that much student loan debt and making college free wouldn’t be cheap. However, Senator Warren says she has a plan for that too.

She would like to fund her plan through an “Ultra-Millionaire Tax.” Families with $50 million or more in wealth – a total of about 75,000 households – would be subject to a 2 percent annual tax, which Senator Warren says would cover universal free college and the debt cancellation.

However, many legislators believe that Senator Warren’s plan is just too expensive. Additionally, some think it would be unfair to erase student loan debt when so many others have already paid off their hefty loans.

Concerns about ensuring schools would control their costs have also been expressed. Since 2001, tuition at four-year institutions has risen over 100 percent (including after being adjusted for inflation).

Can Senator Warren Wipe Out Billions in Student Loan Debt?

In her position as Senator, she does not have the power to move ahead with this plan alone. She would need significant backing from Congress and the President to turn this vision into reality, as it would have a massive impact on the budget.

If Senator Warren was elected in 2020 to become the next President, she could also then try to push this plan forward. However, since it would involve updates to the tax code (to implement her Ultra-Millionaire Tax), changes in the US educational system and funding dedicated through the federal budget, putting it into motion without the support of Congress would incredibly unlikely.

Now, if Senator Warren did garner enough support – either while in Congress or if she becomes President – then wiping out that student loan debt isn’t impossible. Similarly, making public college tuition and fee free is technically something that could happen. It’s just important to understand that there is a long road ahead if that is a plan she wants to implement and, without the proper support from other key government officials and legislators, it probably won’t become a reality.

Are you struggling with student loan debt? Do you think Senator Warren’s plan is a good idea? Tell us about your experience an share your thoughts in the comments below.

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The Grace Period For Student Loans Is Coming To An End

November 18, 2018 By Amanda Blankenship 1 Comment

For those who graduated in May, the grace period for student loans is ending. Many graduates will find their first payment date approaching in late December to early January. With nearly 40 percent of student loan borrowers expected to default on their loans by 2023, it is important to know when your payment is due as well as the different options you may have.

What is the Grace Period For Student Loans?

Many students have a grace period of six months after graduation to make their first payment on their student loans. Folks who graduated in the spring will begin receiving statement letters in the mail this month.

That is, unless you received a Perkins loan (a specific type of federal student loan). If you received a Perkins loan you generally have a nine month grace period.

What Now?

If you’ve received that first bill in the mail, don’t panic. Now is the time to take stock of your loans and create a plan. Know how much you owe and who your servicer is. The servicer company typically will handle sending out statements, collecting payment, and managing your account. Borrowers with multiple loans may have more than one servicer. Check the student loan website to see a full list of loans and servicers.

During this time you should also be sure your student loan servicers have all of your current contact information. This includes a valid email address, home address, and telephone number. Giving them your current information will prevent you from missing a payment.

Private Loans

It is important to note that the federal student loan website will not have any information about your private loans if you took any out for school. If you don’t have the original loan documents, you can reach out to your alma mater to get copies. However, you’ll likely want to begin payments on private loans as well because their grace period is also likely approaching.

Payment Options

If you’re already feeling overwhelmed, remember you have options. Generally, borrowers are automatically enrolled in a 10-year repayment plan. You can get as much as 30 years to repay your student loans.

Some borrowers may find that a 10-year repayment plan is too high of a monthly payment than they can afford. If that’s the case you can request a temporary postponement of payments.

You can also apply for an alternative plan with overall lower monthly payments or income-based payments. This can bring your monthly payment down drastically and, sometimes, lead you to making no monthly payment. It is important to note that this can extend the amount of time you’re paying on loans though.

Each payment plan has different criteria to be deemed eligible. However, having an open line of communication between you and the lender is never a bad idea.

Repayment options can be a bit confusing and, for the most part, many students are required to find everything out for themselves. Even though it may feel awkward to talk about your debt situation with someone over the phone, it is better to explain it than risk going into default.

This Man Escaped His Student Loan Debt By Moving to the Jungle

October 28, 2018 By Amanda Blankenship 6 Comments

Just months ago student loan debt reached a high, ugly milestone of $1.52 trillion. Unsurprisingly, many people find their student debt to be overwhelming, leading to depression and suicidal thoughts in some individuals. In fact, people who are undergoing serious financial stress are eight times more likely to have suicidal thoughts – and some engage in extreme behavior to avoid paying.

Growing Student Loan Debt

Student loan debt has seen a 145% increase in the past decade with no signs of slowing down any time soon. In many cases, individuals carry more student debt than they do in auto loans or credit card debt. For some individuals, the weight of their personal student debt is too heavy for them to carry. Chad Haag was one of those people.

Chad Haag Delt With His Debt by Fleeing the Country.

Haag considered living in a cave in the United States to escape his student debt. According to Yahoo Finance, he already knew a friend doing it. However, for Haag, this wasn’t leaving his problems far enough behind. He wanted to get as far away from his debt as possible.

After majoring in philosophy in college, he held a student loan balance of about $20,000. While that is pennies compared to many other borrowers in the U.S., Haag pointed out that not being able to a land a college-level job made his $300 monthly loan payment devastating to his finances. He was only making $1,700 per month, living with his mother, and rarely going out with friends. “I couldn’t make the math work in America,” Haag said.

Running to the Jungle to Get Away From Debt

He relocated to a jungle in India to escape his student loan debt. In an interview, he said, “I’ve put America behind me.” Now, thousands of miles away from where he once lived in constant anxiety from his debt, Haag says his loans don’t even feel real to him anymore.

His student loans are on their way to being in default and they only thing Haag has to say is, “It’s kind of like, if a tree falls in the woods and no one hears it, does it really exist?” Of course, this kind of care-free attitude has not come without its trade-offs.

Where Haag is living is far from his Colorado home. He is living in a concrete house in a village in India. The house only costs about $50 per month and Haag says he sees elephants outside his home regularly. Haag also referenced the poor living conditions in some areas of India, stating, “Some toilets here are holes in the ground you squat over.”

Food quality can be a problem as well. He recently ate spoiled goat meat that landed him in the emergency room. However, dreams that would have escaped him in the U.S. because of his debt are now becoming realities for him in the jungle of India.

He has gotten married and he and his wife have plans to own a home soon. Currently, he has a five-year spousal visa and has plans to renew it when it comes time. Haag has absolutely no plans to return to the U.S. or repay his student loan debt.

Is This Responsible?

There is no doubt that many Americans find this type of behavior abhorrent. Student loan debt is only expected to continue to rise in the years to come with estimates projecting students will owe $2 trillion by 2022.

Half of the student loan borrowers haven’t paid a single dollar towards what they owe five years into repayment. Another 40% of those loans are expected in be in default by 2023.

However, moving away from the problem doesn’t make it go away. If anyone is moving away, like Haag, to escape their debt, they’ll find that if they ever return to the U.S. their debts will not be gone. Given the structure of many loans, debts are in fact more likely to grow than be excused. Compound interest, late fees, and collection charges are all typically added to your balance if payment is not made. In addition, late payments will impact your creditworthyness.

Not only will it not go away, but running away will make it worse. The best thing you can do is work out a debt repayment plan that works for you.

How to Keep Your Student Debt Manageable

Many people look at student loan debt as “healthy debt.” And while it is much “healthier” than, say, credit card debt, or even an auto loan sitting on your credit report, it still is a huge responsibility. If you or someone in your household is getting ready to head off to college or go back to school, consider thes money-saving tips.

Go to school in-state. It has been common knowledge for years that going to school closer to home costs less money. If you aren’t getting a full-ride out of state, keep your eye on public schools closer to you. A private university’s tuition sits around $34,740 per year on average. An out-of-state public university isn’t much cheaper at $25,620. However, community colleges and in-state public universities are priced at $3,570 and $9,970, respectively. That’s much less in tuition.
Stay at home to avoid room and board fees. Another great thing about going to school closer to home is that you can stay at home. This will save you thousands of dollars on room and board every year.
Oh – and bring your lunches. It can also save you a ton of money on food. Instead of throwing money at a meal plan or eating on campus every day, you can bring your own lunch and save hundreds of dollars per month.
Take a fast-track in your program. Depending on what your career goals are, you may consider asking someone at the university about a fast-track course for your degree. This will shorten the amount of time you’re in college, making tuition much cheaper.
Avoid private loans. If you can help it, don’t take out any private loans. These are typically higher interested and begin to accrue interest while you’re still in school, unlike loans available through the U.S. government.
Consider taking on work-study or paying your tuition in cash while you’re in school. It’s also possible to work while you’re in school to pay off the remaining tuition you owe. Many schools will work with you on monthly payments to remain in class and will apply funds made through work-study programs to these payments. You can also hold a job off-campus to raise additional funds. This way, you can leave school without owing any money on student loans.

Student Loan Debt Repayment

Remember, if you are feeling overwhelmed by your student debt you have options. Before taking off to India or another remote jungle, consider the options below.

Get more time. Although it is not optimal, may be able to extend the repayment period on your loan to give you more time. Periods for repayment start at 10 years and go up to 30 years, depending on the amount and your ability to pay.
Take a couple months off. You can get a couple months off from paying your student loan if you need it. If you or your partner lose a job and you need a couple months to get back on your feet, you can ask for a couple of months off (most of the time) it is granted. Keep in mind, your loan will still be accruing interest during this time.
Income-based payments. Talk to someone at the bank or company you received the loan through about income-based payments. If you believe your payment could (and should) be lower, talk to someone about adjusting it based on your income. They’ll do what they can to help you.
Financial crisis assistance. If you or your family have faced a serious financial crisis, you can also ask for some time off. This is a bit longer of a period of time than the “couple months off” listed above and, similarly, your loans will still be accruing interest. However, it will keep your loans from going into default.
Keep communication open. If you keep communication open between you and your loan officer, you will be able to work on repaying your student loans. In many cases, these individuals are understanding and will work with you based on your individual circumstances.

All in all, student loan debt is just another type of debt that can help or hurt your creditworthyness. However, it is nothing you should feel like you should run away from. Tackling it head-on and paying it down is the only thing that will truly make your debt nightmare go away.

Readers, what do you think about this man running away from his student loan debt?