Student Loans

It’s not a mystery how much money college raises yearly and how most people have to take out loans to afford it. There’s nothing wrong with debt because it’s a great opportunity to improve your credit score, especially as early as 18. However, student loans hurt most people because they underestimate interest. Of the 44 million people who owe student debt they all accumulate to $1.7 trillion. Typically, people who owe more debt pay it off because their occupation can afford it, it’s the people with smaller debts that are taking longer as their income is typically smaller. Of course, there’s an alternative to accumulating debt with grants and scholarships, but there’s still a sum of money owed by alumni. I was just on TikTok the other day watching a woman vent about paying $120,000 in student loans from their original $100,000 loan, and they only actually paid off $5,000 of their loan due to interest. When people are paying off loans they don’t include how interest will drastically increase your owed amount. Every day your interest increases, and soon the original payment is just an idea, and in reality, you owe triple.

DON’T pay the minimum payment or standard repayment plan, sometimes this won’t even cover the interest cost, and you’ll end up like the girl on TikTok, and you’re not taking off any debt. Typically people will say to handle debt like a snowball, knock out the smaller debts first while paying minimum payment on the others, every time you finish a debt you move on to the next until they’re all done. When you give your student loan service more money they tend to just put it for next month, so it’s important to let them know the money is for your current balance. They might try to convince you to stay on the plan, but they aren’t looking for what’s best for you, they just want more money than you’re meant to pay. If you pay your debt like this, you can pay off your debt in a little over a year instead of 30 years with the standard repayment. You’ll have to sacrifice a lot of your expenses to spend so much money on the debt. You might have to spend more time living with your parents or give up that monthly subscription. I promise it’ll be worth it when it’s done, and you won’t have any payments after a year.