Student debt is a huge problem in a country. But what many aren’t aware of is how the cost of college has created a nasty web that’s hard to break out of. Young adults want to continue their education in order to improve their professional opportunities. However, this often requires large amounts of student loans. Then, once the student graduates, they are unable to find a job in their field that pays enough to cover their loans. And that’s when the trouble really starts for them financially.
To paint a clearer picture of what’s going on with the student debt crisis, Gradvisor, an employee benefit that helps parents enroll in and manage 529 college savings plans, created the following Infographic.
By looking at how young adults get caught in the student debt cycle, it becomes easier to see how to get away from the entire system. Some highlights from the Infographic include:
Check out the full Infographic below to see how the student debt cycle can be broken with a little bit of financial planning.
Here are some strategies to help paying off student loans faster:
Set up automatic payments and add extra money to your income, so that you do not have problems paying off the student debt.
Calculate the math right and schedule a payoff date for student loans, such that you do not have to deal with tensions when it comes to making payments within the due date.
If you do not have money or don’t find a source that can increase your income, then decreasing your budget is an easy option. While this short-term option of trimming costs can help with savings and meet your student loan debts on time.
While you get savings from trimming costs and cutting down on expenditure, you can avail of more relief by signing up for automatic payments and one of them is interest deduction. Besides, interest savings this could make your life a whole lot easier. Since with automatic payments, you do not have to worry about missing the date or postponing debt to accrue interest and end up shelling out more.
When you are paying off loans, you are eligible for tax deductions and credits, do make sure to avail of these benefits.
Most of it all, it’s important to realize that student loan debts are not good debt to keep, as it costs your salary and savings every month. While taking student loan for further studies is a good idea, do not make the interest stack up for long to repay loans. You need to be strategic and not look for excuses to procrastinate things for later point of time.