How to Beat Student Loans While Still Having a Social Life
Summer is officially here, and with it comes the graduation ceremonies, celebrations, and trips to faraway lands planned by eager, new graduates. However, if you look deeply in their eyes, you’ll notice a familiar glint of anxiety that sneakily comes with the grand declaration of throwing diplomas in the air — an anxiety caused by the inevitable student loan debt.
According to a Poughkeepsie Journal editorial, U.S. student loan debt has surpassed credit card debt and continues to rise. This came as no surprise when I read it, considering the fact that nearly every college educated friend of mine who took out student loans works long days with overtime constantly added, a scattered schedule that balances two vastly different part time jobs, or a maddening week consisting of a full time job plus an “easy money” part time job like driving for Lyft or Uber.
Whichever work schedule you choose, you still feel yourself drowning at times in the ever growing pool of the $1.5 trillion U.S. student loan debt. Keep in mind that while these loans are issued by both private lending companies and the U.S. Education Department, over $1 trillion of it is lent out by the government. But in doing so, they still allow private loan companies to take over the actual lending process, allowing those companies to decide their own interest rates. The interest rates have been growing and will continue to do so until the Education Department steps in and creates a lower interest rate type of plan to refinance the loans.
Before you declare to the world that we’re all doomed and college is a lie (OK, I might have done that after a night of too much tequila fairly recently), remember that there is always a light at the end of the tunnel—or in this case, a lifesaver jacket within your reach amid the debt pool.
1. Completely Eliminate FOMO Out of Your Life
As a social butterfly, it pains me to say this: you DON’T have to say yes to every single event you’re invited to. Parties aren’t hard to find, your favorite bands will emerge at a local venue when you least expect it, and real friends will understand your absence if you’re in a financial bind — but debt persists, and also grows. If you know that you simply cannot be spending money during a time when your friends are planning a huge, costly trip, do yourself a favor and reevaluate what truly needs to get taken care of first. If you already RSVP’d yes to a wedding, check out resale shops and fashion outlets for a stunning outfit or out-of-the-box gift idea. The more you use your creativity and self-control, the better you’ll feel about not letting the bills pile up.
2. Install a Highly-Rated Budgeting App on Your Phone to Keep Track of Expenses
As a poorly experienced individual in the realm of budgeting, I told myself enough is enough and installed Mint from Inuit Inc. This app will allow me to create a budget, track my expenses, and connect my credit cards and monthly bills to help me see them and pay them in an organized way. Once Mint gets an idea of your spending habits, it will also give you advice on how to budget better, in addition to giving you a free credit score.
3. Watch This Video Provided by Market Watch For Tips if You’re Struggling to Pay Off Student Loans
Rohit Chopra, the former Student Loan Expert of the Consumer Financial Protection Bureau, provides excellent insight on the options that you might not know you even had in taking out a federal student loans.
4. If You Work in Public Service, Check out the Guidelines & Application to See if You Qualify for the Public Service Loan Forgiveness (PSLF) Program
Good news for those who applied for this program in the past and were denied because of not meeting the “qualifying repayment plan” for PSLF: the U.S. Education Department has temporarily expanded its forgiveness program to include those denied in the past. Check out this Forbes article written by Zack Friedman, investor and founder of Make Lemonade, for information on how to be reconsidered for the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program.
5. Consider Refinancing or Consolidating Your Loans Only if You’ve Taken out Both Federal & Private Loans or Numerous Federal Loans & are Financially Stable & Ready to Take on a New Loan
A quick FYI if you don’t know what either term means: refinancing your student loans allows you to combine both federal and private loans into a single student loan with a lower interest rate, while consolidating your loans means combining your numerous federal student loans into a single loan called a Direct Consolidation Loan. Either way, you must be aware that you would need to thoroughly research which private company to refinance or consolidate your loans with. (If you need a starting point, read this article by Business Insider about the company SoFi, which has received praises and high ratings by users due to its easy steps and simplified model of refinancing loans.)
Besides the tips put together for you above, it’s ultimately up to you to continuously stay alert of your finances, clearly communicate with your student loan company representatives to find the best options for yourself, and remain calm and assertive that you will get out of debt. While you don’t have to live frugally or constantly limit yourself in reaping the rewards of your hard work, you do want to have a solid plan intact to budget your money, pay off your debt and maintain a good credit score. Personally speaking, it’s time for this modern brown girl to get money-savvy and show her student loans who la jefa really is.