Break the Cycle of Student Debt with Employee Benefits

November 15, 201610:16 am426 views

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:

  • 63% of young graduates have educational debt.
  • 1 in 10 owes more than $50,000 in loans.
  • 36% of millennial graduates wouldn’t have gone to college if they had known how much it really was going to cost.
  • 25% of millennials still live with their parents because of their student debt.
  • 1 in 9 would eat a tarantula if it meant their loans would be paid off sooner.

Check out the full Infographic below to see how the student debt cycle can be broken with a little bit of financial planning.

infographic-student

Here are some strategies to help paying off student loans faster:

  • Add extra money more than the amount you need to pay on student loan

Set up automatic payments and add extra money to your income, so that you do not have problems paying off the student debt.

  • Do the math right and schedule a payoff date

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.

  • Trim your budget

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.

  • Take interest rate deductions into consideration

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.

  • Make use of tax deductions and credits

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.

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