We’ve been hearing about the student loan problem for years now. People who entered college between 2000 and 2008 were somewhat blindsided by the financial crisis of 2007. They had no way of knowing that the job market would evaporate, that incomes would stagnate, and that once affordable student loans would become a boat anchor tied about the neck.
Those who entered college after the financial crisis of last decade did not have the same excuse. They were already living in the Great Recession. Their parents knew the difficulties, the media was filled with stories about the hard times. Still, thousands of people took on massive student loans, assuming that they’d figure something out down the road.
Unfortunately, paying off student loans slowly is expensive and damaging for financial mobility. This being the case, it’s important to get serious about paying off student loans ASAP, especially if you have goals that you know you can’t achieve without doing just that. For Millennials entering their 30’s, there’s no excuse not to push to pay off your balance. The rewards will be great. Here’s how you can do it, and why it’s worth the hard work.
- Interest and fees make student loans more expensive the longer you hold them. Interest and fees are the extra price you pay for the privilege of borrowing money. For the lender, it’s a financial cushion just in case you stop making your payments. In most cases, a full loan load carried on for a decade or more will cost $10,000 more than a loan paid off in a year.
- People are paying off their loans by earning extra income. This can come from a variety of sources. Perhaps you want to take on a second job, using every bit of that income to pay down your loans. Maybe you want to jump into cryptocurrencies markets, trying to pick winners. Maybe you want to stop wasting money completely, then use every spare dollar to pay off your loans faster. Whatever you choose, it’s only this way that your loans will be gone before their scheduled end date.
- Your monthly student loan payment might seem affordable, but if you have real financial goals, it totally isn’t. Most people with student loans pay at least $300 per month. And while you may be able to make that while still making ends meet, that’s money that could be put to far better purposes. You could save up for a downpayment on a house, go on an amazing vacation after only a few months, or save for your future. With that money going down the drain every 30 days, you’re receiving no personal benefit, and just delaying your future.
There are many reasons to get out from under your student loans as fast as possible, and many ways to do just that. Each method will take hard work and commitment, but when you finally make that final payment and look at the new financial options that have opened up for you, you’ll be glad you did it.