The financial camps are divided between paying off your smallest first vs. your highest interest student loan. So whoâs right? Finance people can agree on a few things. Some debts like payday loans and IRS back taxes are worse than…
The post Which Student Loan Should You Pay First? appeared first on Modern Frugality.
Source: modernfrugality.com
Due to financial consequences of COVID-19 â and the broader impact on our economy â now is an excellent time to consider refinancing most loans you have. This can include mortgage debt you have that may be converted to a new loan with a lower interest rate, as well as auto loans, personal loans, and more.
Refinancing student loans can also make sense if youâre willing to transition student loans you currently have into a new loan with a private lender. Make sure to take time to compare rates to see how you could save money on interest, potentially pay down student loans faster, or even both if you took the steps to refinance.
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Still, itâs important to keep a close eye on policies and changes from the federal government that have already taken place, as well as changes that might come to fruition in the next weeks or months. Currently, all federal student loans are locked in at a 0% APR and payments are suspended during that time. This change started on March 13, 2020 and lasts for 60 days, so borrowers with federal loans can skip payments and avoid interest charges until the middle of May 2020.
Itâs hard to say what will happen after that, but itâs smart to start figuring out your next steps and determining if student loan refinancing makes sense for your situation. Note that, in addition to lower interest rates than you can get with federal student loans, many private student lenders offer signup bonuses as well. With the help of a lower rate and an initial bonus, you could end up far âaheadâ by refinancing in a financial sense.
Still, there are definitely some negatives to consider when it comes to refinancing your student loans, and weâll go over those disadvantages below.
Do you have student loan debt at a higher APR than you want to pay?
Do you have good credit or a cosigner?Â
Do you have federal student loans?
Are you willing to give up federal protections like deferment, forbearance, and income-driven repayment plans?
There are many reasons student borrowers ultimately refinance their student loans, although they can vary from person to person. Here are the main situations where it can make sense to refinance along with the benefits you can expect to receive:
While the reasons to refinance above are good ones, there are plenty of reasons you may want to pause on your refinancing plans. Here are the most common:
Before you move forward with student loan refinancing, there are some details you should know and understand. Here are our top tips and some important factors to keep in mind.
Because student loan refinancing is such a competitive industry, shopping around for loans based on their rates and terms can help you find out which lenders are offering the most lucrative refinancing options for someone with your credit profile and income.
We suggest using Credible to shop for student loan refinancing since this loan platform lets you compare offers from multiple lenders in one place. You can even get prequalified for student loan refinancing and âcheck your rateâ without a hard inquiry on your credit score.
Some student loan refinancing companies let you score a bonus of $100 to $750 just for clicking through a specific link to start the process. This money is free money if youâre able to take advantage, and you can still qualify for low rates and fair loan terms that can help you get ahead.
We definitely suggest checking with lenders that offer bonuses provided you can also score the most competitive rates and terms.
Also keep your personal eligibility in mind, including factors beyond your credit score. Most applicants who are turned down for student loan refinancing are turned away based on their debt-to-income ratio and not their credit score. Generally speaking, this means they owe too much money on all their debts when you compare their liabilities to their income.
Credible also notes that adding a creditworthy cosigner can improve your chances of prequalifying for a loan. They also state that âmany lenders offer cosigner release once borrowers have made a minimum number of on-time payments and can demonstrate they are ready to assume full responsibility for repayment of the loan on their own.â
Also, remember that you donât have to refinance all of your student loans. You can just refinance the loans at the highest interest rates, or any particular loans you believe could benefit from a different repayment term.
Once youâre ready to pull the trigger, there are four simple steps involved in refinancing your student loans.
Before you start the refinancing process, it helps to have all your loan information, including your student loan pay stubs, in one place. This can help you determine the total amount you want to refinance as well as the interest rates and payments you currently have on your loans.
From there, take the time to compare lenders in terms of the rates they can offer. You can use this tool to get the process started.
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Once youâve filled out basic information, you can choose among multiple loan offers. Make sure to check for signup bonus offers as well as interest rates, loan repayment terms, and interest rates you can qualify for.
Once you decide on a lender that offers the best rates and terms, you can move forward with your full student loan refinancing application. Your student loan company will ask for more personal information and details on your existing student loans, which they will combine into your new loan with a new repayment term and monthly payment.
Whether it makes sense to refinance your student loans is a huge question that only you can answer after careful thought and consideration. Make sure you weigh all the pros and cons, including what you may be giving up if youâre refinancing federal loans with a private lender.
Refinancing your student loans can make sense if you have a plan to pay them off, but this strategy works best if you create a debt repayment plan you can stick with for the long-term.
The post Should You Refinance Your Student Loans? appeared first on Good Financial Cents®.
Source: goodfinancialcents.com
Looking to learn how to save money in college? With ever rising college costs, it can really help your current and future finances if you learn how to save money.
Tuition for an in-state public college averages around $25,290. Private college tuition costs twice as much, at an average of $50,900, according to Value Penguin. If you want to go to an elite, four-year university, the cost jumps to $68,000 per year.
And, if you’re going to college for something like medicine or law, you may end up paying hundreds of thousands of dollars over the years that you are in school.
As you can see, college can be very expensive.
However, I want you to know that you can learn how to save money in college so you can get a valuable college degree on a realistic budget.
Many students take out student loans to pay for college, and it can be very easy to borrow more than you actually need. While student loans do help you pay for college, having those loans hanging over your head can set your finances back by years and even decades.
And if you’re a parent trying to help your child, I’ve heard far too many stories of parents who go to great lengths to pay for school. Some take out a second mortgage, personal loans, or borrow from their retirement to send their children to college. The problem with this is that these parents are making it even more difficult to retire at their planned age. Remember, you can’t take out a loan for retirement!
College is just very expensive, but for many students it’s an important part of how they work towards a job or career they’ve always wanted. But, I want you to know that you can learn how to save money in college.
By cutting college costs, you can lower your student loan debt, or it can help parents reduce the amount they are borrowing or taking out of savings to pay for their children’s education.
Or, with these tips on how to save money in college, you may be able to attend college without racking up any student loan debt. Remember, that is also possible!
Related articles on money saving plan for students:
I know many students who think about which college their friends are going to or which one is ranked the highest. But, you should think about which college is best for you and your specific major.
Sometimes, the highest ranked or most expensive college may not be the best for your actual major, which can hurt you in the long run and it isn’t how to save money in college.
When thinking about whether or not a college is right for you, here are some things you’ll want to consider:
There’s a myth that expensive colleges are always better than the cheaper ones. As if higher college costs means that you’ll automatically get a great job, you’ll have an extremely high salary, and more.
One way of learning how to save money in college is to just stop believing in that myth!
In fact, according to an article in The Wall Street Journal:
From the academics [who have studied whether students from elite institutions outperform their peers or not] we know that in terms of future earnings, 1) your choice of field matters more than your choice of college, 2) after controlling for ability, the earnings differences of graduates from elite and non-elite institutions are small at best, and 3) any earnings advantage that may emerge over the long run is difficult to concretely tie back to the effects of one’s college choice.
There is a lot that goes into the full cost of college, and it’s not just the initial tuition cost.
The most expensive school may actually be able to give you more scholarships than a less expensive school. That means the most expensive school may actually be the cheapest in the end, and this is why you need to think about the total cost.
And, there are still many great colleges that don’t come with a high tuition.
There are many factors that determine real college costs, and due to this, you’ll want to think about things such as:
Doing those last two things is one of the best ways to save for college, so please apply for scholarships and financial aid!
Considering all of the factors I’ve just listed can help you learn how to save money in college, and when you put them together, it may change your mind on which college provides the best value.
When thinking about how to save money in college, you also want to remember that college isn’t the only thing that’s important. Yes, you definitely want to take it seriously and learn as much as possible, but there are other factors that are extremely important as well.
These other factors may play an even bigger role in helping you land the job you want.
Some of the other points you’ll want to keep in mind include:
And more!
With those things on your resume, you may put yourself ahead of others that are applying for the same position. These things are important no matter where you went to college.
Remember, companies want to see that you can apply what you learn and that you actually have experience.
When you graduate with a four-year degree, the school name on your diploma will be the name of the college you graduated from. It won’t say, “graduated from here but took some classes at community college.” This is because your community college credits are transferred (if you follow the correct steps as outlined by your school).
If you are wondering how to save money in college, this is a great way to cut college costs.
Whether you are in college already or if you haven’t started yet, taking classes at a community college can be a great way to save money.
Community colleges provide an enormous value. However, many think they are too good to save money by taking classes at a community college.
Usually, earning credits at a community college costs just a fraction of what it would cost at a 4-year college, so you may find yourself being able to save thousands of dollars each semester.
You may only spend $5,000 a year at a community college (most likely even less), which is a huge difference from the costs that were mentioned at the beginning of this article.
There is also a myth that your degree is worth less if you go to a community college. That is not true at all. When you eventually earn your 4-year degree, your degree will only say where you graduated from and it won’t even mention the community college credits. Your degree will look the same as everyone else that attended your college, whether you took a few classes at community college or not. You might as well save money!
I only took community college classes during one summer semester where I earned 12 credits, and I regret not taking more. I probably could have saved around $20,000 by taking more classes at my local community college.
Also, community colleges are great for getting general type credits out of the way, so you’re not missing the interesting and in-depth classes that gives your 4-year college the reputation it’s known for.
If you decide to go to a community college first, always make sure that the 4-year college you plan on attending afterwards will transfer all of your credits. It’s an easy step to take, so do not forget! You should do this before you sign up and pay for any classes at the community college.
Related post on how to save money in college with community college: I Thought I Was Too Good For Community College.
One way of how to save money in college starts while you’re in high school. See, many high schools offer dual credit classes that allow you to earn both college and high school credits at the same time. Most of the time, these are done right at your high school, so you don’t have to go out of your way to take them!
If you are still in high school, this is something I highly recommend you look into, as it saves time and it might even be the best way to save for college.
When I was in my senior year of high school, nearly all of my classes were dual enrollment courses where I was earning college and high school credit at the same time. I took AP classes and classes that earned me direct college credit from nearby private universities.
Due to this, I left high school with around 14-18 credit hours (I can’t remember the exact amount). I had knocked out a whole semester of college before even starting. I could’ve taken more, but I decided to take early release from high school and worked 30-40 hours a week as well.
At community colleges, you typically pay per credit hour.
However, at many universities, you pay a flat fee for your college tuition. So, whether you take 12 credit hours or 18 credit hours, you may be paying nearly the exact same price.
This is why I recommend that students who are paying a flat fee tuition take as many classes as you can. Now, you may want to make sure your classes are balanced because 18 credit hours of demanding courses can take a toll on you. But, this will allow you to take full advantage of high college costs.
If you think you can still earn good grades and do whatever else you do on the side, definitely get full use of the college tuition you are already paying for!
If you want to learn how to save money in college, applying for financial aid and scholarships is one of the most important things to do.
But, according to a study by NerdWallet, for the 2018-2019 school year, students left $2.6 billion of free college money on the table. That was Pell Grant money that students qualify for by filling out the FAFSA, which is easy to fill out and necessary for any financial aid or scholarships.
So, before you start your semester, you should always look into scholarships, grants, and fill out your FAFSA (click here to read my FAFSA tips). Paperwork for the following semester is usually due around spring, so I highly recommend doing this as soon as you can if you are planning on attending college in the fall.
Sadly, many people believe that scholarships are impossible to get. That is just another myth, and it’s probably why so students missed out on so much money last year.
I received around several thousand dollars a year in scholarships to the private university I attended. That helped pay for a majority of my college tuition. The scholarships were easy for me to get because I earned good grades in high school and scored well on tests. I received scholarships to all of the other colleges I applied for as well, just for good grades, so I know you can find scholarships if you do well in school!
And, there are still other ways to find scholarships. You can receive scholarships from private organizations, companies in your town, and more. Do a simple Google search and I am sure you will find many free websites that list possible scholarships.
Tip: Many forget that you sometimes have to turn in a separate financial aid form directly to your college on top of the FAFSA form. Contact your college’s financial aid office and see if there is a separate financial aid form that you should be filling out as well. Don’t forget to do this by the deadline each year!
One of the top money saving tips for university students that I recommend is to be careful when it comes to taking out student loans!
Many students take out the full amount in student loans that they are approved for even if they only need half of that amount.
This is a HUGE mistake. If you want to learn how to save money in college by reducing your student loan debt, start by only taking out what you truly need. You will need to pay back your student loans one day, and I know many people who regret taking out more than they need.
I know someone who would take out the max amount each semester and buy timeshares, go on expensive vacations, and more. It was a huge waste of money and I’m still not even sure why they thought it was a good idea.
Just think about it – If you take out an extra $2,000 a semester, that means you will most likely take out almost $20,000 over the time period that you are in college.
Do you really want to owe THAT much more in student loans?
There are a lot of college costs, and buying textbooks is one of them.
Students usually spend anywhere from around $300 to $1,000 on textbooks each semester, depending on the amount of classes they are taking and their major. Just one textbook alone may cost as much as $400!
When I was in college, many of my classes required more than one book and each book was usually around $200 brand new. This meant if I were to buy all of my college textbooks brand new, I probably would have had to spend over $1,000 each semester.
I learned how to save money in college by renting my textbooks or buying them used. Renting was nice because I only paid one fee and never had to worry about what to do with the textbook after the class was done, as I only had to return it. I didn’t have to worry about a new edition coming out and the book being worthless. Buying used textbooks was nice because sometimes I could resell them and make my money back.
If you don’t need to commute off campus for work, then you may want to think about whether you may be able to realistically get rid of your car. Not everyone in college will need a car with them, and this can be an easy way for how to save money in college.
By not bringing a car, you may be able to eliminate the monthly loan payment, a campus parking permit, fuel, maintenance costs, and more.
Your student ID is good at many places beyond just your college campus. Before you buy anything, I highly recommend seeing if a company offers a student discount.
Your student ID can be used to save money at restaurants, clothing stores, electronics (such as a new laptop!), at the movies, public transportation, and more. You may receive a discount, free items, and more all just by showing your student ID.
After all, you are paying to go to college and you are paying a lot. You might as well reap all of the benefits of paying those high college costs.
Many college students fall into credit card debt, but I don’t want you to be one of them.
Credit cards can seem like a good option when you are living on such a low college budget, but this can lead to thousands of dollars of credit card debt. That will eventually seem impossible to get out of due to significant interest charges that keep building up.
In order to never get into this situation, you should avoid credit cards at all costs if you think that you won’t use them well.
You should think long and hard about whether you should have one or not. Just because other students have a credit card doesn’t mean they know what they’re doing! However, if you think you will be good at using them, then there are many advantages of doing so.
Related post: 6 Credit Card Myths You Need To Know The Truth About
If you’re paying for a savings or checking account, you should think again.
Opening a high yield savings account is one of the best ways of how to save money in college because it’s actually growing your savings. But, most people have their money in accounts with low rates. Unfortunately, that means many of you are losing out on some easy cash!
With Betterment Everyday, you can start earning 2.39% with a balance as low as $0.01.
How does that compare to the national average savings rate? While it’s actually higher than the ones I listed earlier, it’s still a very sad 0.09%. That is a HUGE difference from what Betterment Everyday is offering. If you are only getting 0.09%, then you are losing out on easy, passive money.
Savings accounts at brick and mortar banks are known for having really low interest rates. That’s because they have a much higher overhead – paying for the building, paying the tellers, etc. Betterment Everyday is an online option, which means they have lower costs, then passing the savings on to you.
Over a 10 year period, that same savings balance with a 2.39% balance would earn you an additional $2,390, whereas a savings account with an interest rate of only 0.09% would earn you a mere $90.
Your money is just as safe in a Betterment Everyday account as it is with a brick and mortar bank. You’re just earning more interest, which is something that everyone wanting to learn how to be rich can take advantage of.
To get started and open a Betterment Everyday account, you will:
See, super easy!
Read more at How To Earn Over 20x The National Savings Rate.
While I wasn’t smart enough to graduate from college without debt, I do know of many amazing people who were able to pay for their college tuition on their own while they were in school. They learned how to save money in college with the tips above, but they also found ways to make money that allowed them to pay their college tuition bill in full each month.
I did work full-time all throughout college. That helped me pay my bills, take out only what I needed in student loans, and go without any credit card debt.
Whether you only have one free hour a day or if you are willing to work 40 to 50 hours a week on top of being in school full-time, there are many options when it comes to earning extra money.
Here are some things you can do to pay for those high college costs:
Learn more at 100+ Ways To Make Extra Money.
Related tip on how to pay off student loans: I highly recommend Credible for student loan refinancing. You can significantly lower the interest rate on your student loans which may help you shave thousands off your student loan bill over time.
Everyone has a birthday, and you may be able to score a lot of free birthday stuff by simply showing your date of birth date on your driver’s license or by signing up for a company’s email club to receive a coupon for your birthday.
This is a really fun way to learn how to save money in college and it’s easy and free for everyone!
Here are 31 Birthday Freebies You Should Sign Up For.
Most people overpay for their cell phone plan – they can easily cost over $100 per month.
I know that once you find a provider you like, it can be hard to switch. But, once you know how much you can save with another company while still having great service, this is a no brainer.
If you are looking for a more affordable cell phone plan, then check out Republic Wireless. They have monthly cell phone plans for as low as $15 per month.
I have several family members who are now using Republic Wireless and they love it!
Please read Saving Over $2,000 A Year With Republic Wireless Review for more information.
Budgets help people manage their money better. It’s that simple.
Budgets are great and one of the best ways for you to learn how to save money in college because having a budget will keep you mindful of your expenses and how much money you have in the bank. With a budget, you will know exactly how much you can spend in a category each month, how much you have to work with, what spending areas need to be evaluated, among other things.
You can download a free budget printable here.
Budgets have helped people reach their goals, pay off debt, make more money, retire early, and more. This is one of the college savings tips that will completely shape and change your financial life for the better.
Learn more at The Complete Budgeting Guide: How To Create A Budget That Works.
When you’re in college, the library can often feel like your second home (and not always in a good way). But, did you know that your college or local library can also be a great way to have fun without spending any money.
You can check out the latest bestseller, a classic you’ve been wanting to read, or borrow movies, music, and more. There are actually a lot of libraries now who let you borrow things like cameras, GoPros, even telescopes, and more.
This is definitely one of the best ways to save money in college as all you need is a library card.
If you decide to live off campus, then finding a roommate is going to be one of the best ways for how to save money in college.
My husband and I have had roommates in the past. While that’s not really as possible now that we split our time living on a sailboat and an RV, I still recommend that anyone with an extra room in their house think about giving it a try.
If you find a roommate while in college, you can save a good amount of money on housing costs. And, depending on your situation, you might even be able to earn a little side income.
If you are interested in renting out a spare room on a short-term basis (such as for vacations), I highly recommend that you check out Airbnb. I know people who are making thousands of dollars a month by renting out rooms on this website.
Related blog post with more saving tips about this topic: A Complete Guide To Renting A Room For Extra Money.
This is something you can and should start doing at any age because reading personal finance books can help you in so many ways. Since many schools don’t go in depth on things related to personal finance, books are a great way to improve your financial knowledge.
Personal finance books I recommend reading are:
You can find the whole list of personal finance books I recommend here.
If you’re a parent and you’re reading this, then you may be wondering how you can help your child in college but not go broke yourself.
If you cannot afford to pay for your child’s college costs, or if you decide that you just do not want to, there are many other things you can do to help them. You should also read this You Don’t Have To Go Broke For Your Kid’s Education.
I believe that parents should only fund their child’s college education if the parent is on track for retirement.
This is because there are many ways to pay for college (paying for it with cash, student loans, grants, scholarships, etc.), but there is only one way to fund your retirement.
Remember, you cannot take out a loan for your retirement!
This means you should not wreck your retirement plans to help your children through college. You should analyze your financial situation first and where you are on your track for retirement to see if helping your children through college is possible. If it’s not possible, be realistic with yourself and your child.
There are many ways to help your children with college costs that don’t involve paying for their college tuition.
You can:
What other ways are there to learn how to save money in college? How much student loan debt do you have?
The post 21 Ways You Can Learn How To Save Money In College appeared first on Making Sense Of Cents.
Source: makingsenseofcents.com
As Americans grappled with the financial consequences of the pandemic in March of this year, the federal government took several actions to help cash-strapped consumers. For starters, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in late March of 2020, which included a temporary suspension of payments and interest for government-owned student loans through the end of September 2020.
Beyond just suspending payments and interest, the act also halted all collections activities on federal student loans. Americans pursuing Public Service Loan Forgiveness (PSLF) would see these non-payment months counted toward the 120 months of payments needed to have their loans forgiven.
You can continue making payments on your federal student loans during the deferment period if you want to. Whether you should, depends on your goals and your situation.
This announcement was a huge relief for Americans with student debt since it meant they could pause federal student loan payments without accruing interest or facing penalties for several months. And recently, this assistance was extended for the remainder of 2020.
According to a memorandum from the White House, this extension intends to âprovide such deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020.â
What does this mean for borrowers? The extension of this order means that those with federally owned student loans (not private student loans) can continue skipping payments for the duration of 2020. Interest wonât accrue on federal student loans during this time, and penalties wonât come into effect for those who choose to defer loan payments.
Although unemployment numbers have improved since the summer, the initial pause on federal student loan payments was of massive help for borrowers struggling with job loss or a loss in pay. After all, getting a break from student loan payments made room for funds to go toward other household needs and bills. Keep in mind that the average student loan payment is approximately $393 for all borrowers, but that many with advanced degrees pay significantly more than that every month.
When the Presidential action was released, it was unclear whether borrowers pursuing PSLF will still receive credit for non-payment months. However, a U.S. Department of Education press release clarified that PSLF borrowers would, in fact, receive credit toward loan forgiveness as if theyâd made on-time payments.
Just keep in mind that this order does not apply to consumers with private student loans. Only federal student loans qualify for this protection, although some private student loan companies are offering their own separate deferment options to consumers who can show financial hardship.
One interesting detail from this order is buried in the fine print:
âAll persons who wish to continue making student loan payments shall be allowed to do so, notwithstanding the deferments provided pursuant to subsection (a) of this section.â
In summary, you can continue making payments on your federal student loans during the deferment period if you want to. Whether you should, depends on your goals and your situation.
If you havenât faced a loss in income, then you might be tempted to continue making payments on your student loans. The benefits of doing so include:
There are a few potential downsides to making student loan payments when theyâre not required. Plus, borrowers with certain types of student loans should not be making payments right now.
Here are a few considerations to keep in mind.
Individuals who want to pay off their loans quickly would be smart to pay as much as they can, but only if they can afford it. It also makes sense to be cautious about any extra income you have for the time being. After all, more economic pain may be on the way, and itâs possible you could face a loss in income later in the year.
Without any interest accruing on federally owned student loans during this historic forbearance, however, you could always put your student loan payments into a high-yield savings account until the end of the year. At that point, you can assess your financial situation and make a large, lump sum payment toward your loans if you want.
This strategy creates a greater safety net for the remainder of 2020 while also paying down debt faster with a large payment before the end of December. Run the numbers and make sure you have a plan (and a back-up plan) in place.
The post Should You Make Payments During Coronavirus Student Loan Deferment? appeared first on Good Financial Cents®.
Source: goodfinancialcents.com
More and more are choosing to attend college and work at the same time.
Whether you are working a part-time or a full-time job, it can be tough to balance both. There are many working students in college who are able to manage both, but there are also many who aren’t able to.
If you don’t balance them both correctly, it may lead to stress, lower grades, low-quality work being produced, and more.
No one wants that and I’m sure you don’t either.
Related: 21 Ways You Can Learn How To Save Money In College
This is supposed to be the time of your life where you are growing and changing, not feeling like you are drowning in everything that is going on around you.
There are ways to get around it and manage both successfully at the same time, though.
I took a full course load each and every semester, worked full-time, and took part in extracurricular activities. It was definitely hard and I won’t lie about that. However, sometimes a person doesn’t have a choice and has to do everything at once or maybe you are choosing to multi-task and you are wanting to better manage your time.
Related post: How I Graduated From College In 2.5 Years With 2 Degrees AND Saved $37,500
Whatever your reason may be, below are my tips for working college students. The tips below are what helped save me!
My first tip for working college students is to carefully plan your class and work schedule.
Some students just choose whatever classes are offered. However, it is much wiser to carefully craft your school and work schedule so that everything flows together efficiently with minimal time wasted.
You can do this by researching into what classes are offered when and trying to eliminate any gap that may be in-between each class. Having an hour or two break between each class can quickly add up. Also, if you happen to have time off between classes, then using this time to do your homework and/or study can be a great use of time as well.
Related post: How I’m a Work-Life Balancing Master
There are many time sucks that you may encounter each day. A minute here and a minute there may add up to a few hours wasted each day.
The time you save could be used towards earning more money at your job, studying, socializing, or whatever else it is that you need or want to do. For working college students, every minute is important.
There are many ways to eliminate any time wasters including:
Related post: 75 Ways To Make Extra Money
Working college students experience a lot of distractions.
Noise in the background, such as with a TV that is on or a party your roommate may be throwing, can distract you from what you need to be doing. If you are trying to study or do homework then you should try to find a quiet place to get work done.
You may want to close your bedroom door, hide the remote from yourself (trust me, this works!), go to the library, or something else.
Related: 16 Best Online Jobs For College Students
Having a to-do list is extremely helpful for working students in college because you will know exactly what has to be done and by when. You will then have your responsibilities sitting there right in your face so that you will have to face reality.
Plus, I know that when I am stressed it can be easy to forget things, so having a to-do list eliminates any valuable minutes I may waste debating about whether I forgot to do something.
While one person may be able to work like crazy and attend college at the same time, not everyone can do that.
If your grades are dropping, then you may want to analyze whether you should drop your hours at work or school. What is more important to you at this time and for your future?
With the tips above for working students in college, you’ll be able to rock both your job and your college classes at the same time. Don’t forget to fit in time for fun as well. Good luck!
Are you one of the many working college students out there? Why or why not?
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It seems pretty normal to me now but people still drop their jaws when I tell them weâve paid over $45K on our loans in less than a year. We still have a year to go and most days I…
The post How We Paid Off Over $45K of Debt in 11 Months appeared first on Modern Frugality.
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Nobody wants to pay off student loans longer than they have to, yet far too many people are stuck in lengthy repayment plans that seem like theyâll never end. While income-driven repayment plans backed by the federal government ask you to pay down loans for 20 to 25 years before leading to loan forgiveness, even the âstandardâ repayment plan for federal loans lasts for a full ten years. No matter how you cut it, thatâs a long time!
With that in mind, you should know that itâs possible to pay off student loans faster if you are willing to think outside the box and forge your own path along the way. However, not all early repayment plans will work for every borrower, so itâs important to think through how to pay off student loans faster in a way that helps you reach your goals in a common sense way.
One strategy many borrowers use to pay off student loans faster is refinancing loans with a different lender. Not only do some student loan refinancing companies offer lower interest rates and flexible repayment terms, but you could even earn a cash bonus just for signing up.
The sooner you can pay off all your student loans, the quicker you can move on with your life. Here are some strategies to consider that can help you pay off your student loans much faster than a traditional repayment plan allows.
What You’ll Learn
The minimum payment on your student loans is the absolute minimum amount youâre supposed to pay, but thereâs nobody stopping you from paying more. And, if you make extra payments the right way, you could easily pay down the principal of your student loans at a faster pace.
Unfortunately, many student loan servicing companies wonât automatically apply extra payments you make toward your loan principal. Instead, theyâll use any payment overages to âpay aheadâ on your loans and continue making the next monthâs payments as well as the prepaid interest for future months.
If you decide to pay extra toward your student loans, youâll need to specify that you want overage payments to go toward the principal of your balance. You can do this over the phone or by written message when you mail in your monthly student loan payment, but make sure you donât forget.
The debt snowball method for getting out of debt is worth considering if you have several different student loan bills to juggle each month. This strategy requires you to make a list of your student loans and each of their balances. From there, youâll start the next month by paying the minimum amount on all your largest loan balances and as much as you can on the smallest balance you have. Over time, youâll continue paying as much as you can toward your smallest balances until theyâre gone, at which point youâll âsnowballâ all your extra payments toward the next smallest debt.
With the debt snowball, youâll slowly pay off your smallest loan balances until you only have the few largest balances left. Eventually, youâll only have one student loan left and youâll pay all the cumulative payments of all the others toward this debt until itâs gone, too.
The benefit of this strategy is the momentum youâll gain as you knock out small balances one at a time. Not only will your balances go down, but youâll have fewer loan payments to make each month as well.
You can also consider refinancing all your student loans into one new one, which has the potential to save you more money than any other strategy on this list. Many private student loan companies offer fixed interest rates as low as 3.50% right now, which is lower than any federal student loans offer. Of course, you do have to have an income and good credit or a cosigner to qualify.
How much can you save by refinancing your student loans? That really depends on how much debt you have, your current interest rate, and your current repayment timeline.
However, letâs say that you have $10,000 in student loans with an APR of 7% and you just started a 10-year repayment plan. In that case, you would pay $121.33 per month for ten years and a total of $4,559 in interest before your loan was paid off.
If you were able to refinance your loans into a new private loan with the same repayment plan at 3.50%, however, you could pay just $96.56 per month for ten years and only $1,587 in interest during that time. Better yet, you could refinance into a new 7-year loan, pay $132.13 per month, fork over only $1,099 in interest during that time, and shave three full years off your repayment timeline.
Some student loan companies offer discounts to customers who are willing to sign up for automatic payments. This discount is usually around .25% off, but all you have to do is allow your student loan payment to be debited from your checking account automatically each month.
These programs make it easy to stay on track with your student loan payments, and they also ensure you are never late. All you have to do is make sure you have the cash in your account before the date your payment is automatically debited each month.
If you havenât graduated from college yet, itâs not too early to start preparing for the inevitability of that first student loan payment. Further, it can be extremely smart to make payments while youâre still in school if some of your student loans are unsubsidized.
Whatâs the difference between subsidized and unsubsidized student loans? By and large, the biggest difference is the fact that the federal government pays the interest on subsidized loans while youâre still in college, but they do not extend this benefit to unsubsidized student loans. By making payments on unsubsidized loans while youâre still in school, you can keep student loan interest at bay and keep your loan balances from ballooning until you have a job and can attack your student loan debt with all your might.
Itâs tempting to inflate your lifestyle once you graduate from college and start bringing in a paycheck, but this is the opposite of what you should do if your goal is getting out of debt faster. The longer you can live at home with your parents or share an apartment with roommates, the more money you can continue throwing toward your student loans. And, if you can hold off on buying a house or financing a new car, youâll be in even better shape when it comes to destroying your student loan debt at a record pace.
Finance guru Dave Ramsey frequently gives the following advice, which I absolutely agree with:
âLive like no one else now so you can live like no one else later.â
Living the poor student lifestyle for as long as possible is a smart way to pay down debt when youâre first starting out.
If you have roommates, keep them.
If youâre managing to get by on Ramen, keep it up.
Once your student loans are paid off and in your rearview mirror, you can start using your income to pay for the lifestyle you really want.
If you want to pay your debts down even faster, earning more money is one approach that always works. The key here is making sure you use the extra money you earn to pay off your student loans instead of paying for stuff you donât need.
Weâve shared myriad side hustles here on Good Financial Cents in the past, from 65 side hustles you can do from your kitchen table to ideas on starting an online business. Some of the easiest ways to earn money include driving for Uber or Lyft, starting a blog, or learning an online skill people will pay you for. You could become an online freelance writer or sell your design or data entry skills with a website like Fiverr.com. Heck, you could walk dogs in your spare time or mow peopleâs yards in your neighborhood.
The basic principle is the same no matter what side hustle suits your fancy. Pour as much time or effort into your side hustle as you can, and use all the extra money you earn to pay off your student loans.
If you get any extra money during the course of the year, you should absolutely throw your âfoundâ cash toward your student loans. This can include your tax refund each year, any Christmas bonuses you get from employment, and money you get from working over time. Heck, you can even throw your birthday money at your student loans.
Any extra money you pay toward your loans can be used to reduce the balances of your debts, which in turn lowers the amount of interest you pay over the life of your loan.
Remember that, when it comes to paying off debt, even small amounts of money can add up in a big way. By throwing all found money you come across toward your loans each year, you can expedite your debt payoff process even more.
While asking your boss for help with student loans is a fairly novel concept, it isnât unheard of.
Actually, nearly anything is on the table when youâre negotiating your salary or benefits â and sometimes, the key to getting what you really want is just asking for it.
Further, some industries and government agencies have already thought of this option. For example, some government employees can receive up to $10,000 a year towards student debt repayment by accessing the federal governmentâs Student Loan Repayment Program.
Similar programs are also available for nurses and teachers through the Nursing Education Loan Repayment Program and Teach for America, which is part of AmeriCorps.
Students who find work in the public sector can also get help with student loans by applying for the Public Service Loan Forgiveness Program.
With this option, the federal government will forgive the remaining balance on your Direct Loans provided you have made 120 qualifying payments and remained employed with a qualified employer in the public service sector.
Plenty of people have used these tips and others to pay off their student loans once and for all. We reached out to several people who have paid off their loans for good to find out how they did it and which strategies they suggest. Hereâs what they said:
âIn my early 20âs, I was paying a very affordable $160 per month on my $25,000 of student loan debt. It wasnât much to pay and it seemed my balance never decreased. Thatâs one of the reasons I decided to start blogging at 28 years old. After about six months, I started earning extra income from my blog and began sending extra payments toward my student loan.
As my blog income grew, I was able to send chunks of $1,000 to $2,000 pretty regularly in my 30âs and I finally began making a dent in my balance. I made my final student loan payment at 38 years old and it was glorious. Had I not been able to send in extra money, I probably would have been paying student loans into my 50âs.â â Chris Huntley, co-founder of Credit Knocks
âMy wife graduated with over $80,000 of student loan debt, but we managed to pay it all off in just under three years. We had to make sacrifices to pay that much debt off quickly, but we also had other things going for us that made it easier. My wife is a registered nurse and I was an accountant at the time so we earned a reasonable income.
We didn’t have anyone else relying on us so our spending decisions only impacted ourselves. We kept our expenses to the minimum and continued to live like college students to put as much money toward the debt as we could. We bought a small townhouse that resulted in a monthly mortgage payment of only $500.
We had a very limited fun budget and didn’t go on traditional vacations. We refused to buy new furniture (except for much-needed mattress) or go out to eat multiple times per week. Instead, we cooked at home and relied on hand-me-downs or used furniture to get by until the debt was paid off. We also put off decorating and renovating our home unless the cost was minimal and we could do the work ourselves.â â Lance Cothern, founder of Money Manifesto
âI paid off almost $43,000 in student loan debt in three years. First, I worked full-time during college and that helped minimize expenses. After graduation, I was promoted at my same company, and earned a starting salary of $45,000 per year.
However, while working, I was also side hustling and earning extra money. My main side gig was buying things to resell on eBay. At my peak, I was making a profit of about $2,000 per month. I would also do off jobs, and I started my blog, The College Investor.
Between my day job and side hustle earnings, I was able to knock out my student loans in a short amount of time.â â Robert Farrington, co-founder of The College Investor
Thereâs no reason to pay off your student loans any longer than you have to. Any of the tips on this list could help you get out of debt faster, and itâs even possible to use more than one of these tips to annihilate your debts at lightning fast speed.
As the nationâs total student loan debt levels continue to rise, we all have to take responsibility for ourselves. Let the numbers fall where they may; itâs up to us to find ways to get our finances straight â and if that process includes paying off student loans the hard way, so be it.
Just remember, youâve got a wealth of tools at your disposal.
Using everything from debt calculators to budgeting tools, you can dream up dozens of ways to get out of debt faster, and most importantly, smarter.
With student loan debt levels at an all-time high, youâre going to need all the help you can get.
The post How To Pay Off Student Loans Faster Than Ever appeared first on Good Financial Cents®.
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