June 26, 2019

How to Pay Off Student Loans Fast in 2017

The problem of student debt is worse than people assume. Five years ago, total debts have exceeded $1 trillion and with tuition fees continuously rising – it’s safe to say this burning issue isn’t going away. In addition to the devastating fact that high costs are turning education into a privilege, student loans are also taking the mental and physical toll on those pursuing a degree.

But when people are forced to participate in a certain system, there’s nothing else to do than to find a way to adapt. Last year was marked by Elizabeth Greenwood faking her death to escape over $100.000 in student loans. While these extreme measures might not be the best option, there are ways you can pay off student loans fast in 2017.

Pay More Than the Minimum, Starting From Variable Private Loans


By paying more than the minimum monthly payment, you’re reducing your loan’s principle which prevents interests from accumulating. The more balance you take off, the lower your interests get. In addition, you should prioritize settling variable private loans first. Interest rates of this type of loans are expected to rise up to 6% in the next four years, putting more financial burden on students. Commit to eliminating this debt – you can do so by segmenting your payments. Divide payments and make one per every two weeks and you’ll end up paying off more per year. There are 52 weeks in a year: by making a payment every other week, you’ll pay off 26 payment, i.e. 13 full monthly payments.

Check Refinancing Options


Even though rates in the case of variable private loans are less predictable, they typically start out lower than in cases of fixed-rate loans, which is why students choose them. Lenders are not held responsible for the rates increasing. Here’s why you should think about student loan refinance options: you can switch to a fixed rate and get a lower interest, benefit from a more flexible repayment plan, and consolidate all debts into one. It could be a smart strategic move, although caution is advisable. Many make the mistake of locking themselves in a plan that implies small monthly payments, but also a large loan’s lifespan and increasing interest over an extensive period of time, for example, 25 years.

Turn to Your Employer


Employer student loan repayment is getting more popular for eliminating debt. Basically, employers who offer this type of help provide monthly financial aid that’s somewhere between $100 and $300 on average. So, how beneficial is this to you in real life? A little bit of math: an average student loan debt in 2016 was around $37.000, so if you have a ten-year plan and an interest rate of 6%, you’re expected to pay a little more than $410 per month. After a decade, you will have paid around $12.300 in interests. But with the monthly help of your employer in the amount of $200, you’ll be able to pay off your loan in just 6 years and with around $7150 interest. Negotiate these options when discussing salary.

Ask Around About Tax Deductions


Did you know you may be entitled to tax deductions regarding student loans? A person who is eligible to apply for the tax deduction can expect to save up to $2.500 on student loan interest in a year. However, your income has to be lower than $80.000 and if you earn between $65.000 and $80.000, the deduction is reduced. Needless to say, you can only deduct loans if they come from qualified sources. Loans from friends, family, or your employer don’t count. Most of the U.S. colleges are part of this system, so take advantage of what IRS has to offer if you’re eligible to apply.

In addition to these tips, always have a budget plan in mind. Remember: consistency is the key to paying off your student loans.





OPINION: Keep down the rates of student loans

Education is the key to success—a “silver bullet” for changing lives in all segments of society. An affordable, quality college education must be available to all, not just the wealthy.

Horace Mann, the renowned innovator in public education, said that “Education … beyond all other devices of human origin is the great equalizer of the conditions of men, the balance-wheel of the social machinery.”

This is why, as educators, we must do all we can to convince lawmakers in Washington that they must not allow the interest rate on millions of so-called Stafford loans to double from 3.4 percent to 6.8 percent. That will happen automatically on July 1 if Congress fails to act. It would affect 7 million students nationwide—400,000 in New York alone—and raise costs by an average of $1,000 each, the White House says. Doubling loan rates would cost New York students and their families an estimated $419.7 million.

Student loan debt is among the vital issues facing young Americans today. It has reached more than $1 trillion—higher than the debt on credit cards and car loans. The average balance nationally is about $23,000.

President Obama is urging Congress to keep the interest rates low; his presumptive Republican challenger, Mitt Romney, agrees. The political fight in Congress seems to be over how to pay for it.

This crushing debt comes on top of tuition increases. Tuition and related expenses increased 400 percent in the 30 years between 1980 and 2010, while median family income rose just 150 percent in the same period.

As a college president, I know firsthand how important it is that something be worked out. We must educate our young people in order to have a productive workforce. Hampering higher education will ultimately lead to the decline of America as a world power. We cannot survive as a nation in the global marketplace without student loans at a reasonable rate.

A recent CBS/New York Times poll found that two-thirds of Americans feel there is too much disparity between the haves and have-nots in our country. In considering ways to narrow the income gap, one constant factor is the strong relationship between education and lifetime income.

The U.S. Bureau of Labor Statistics says that median weekly earnings for college graduates for the third quarter of 2011 was $1,152 per week, compared to $636 for high school graduates and $459 for those without a high school diploma. So one of the most important goals of higher education ought to be to provide our young people with a high-quality education based on merit rather than means.

Increasing the interest rate on student loans will only serve to make it more difficult for low- and middle-income students to receive a high-quality education that will ensure upward mobility.

It is the responsibility of those in leadership positions to help provide access to a good education for all sectors of our nation. We must help nurture the next generation of entrepreneurs, thinkers, innovators and business leaders who one day will make their mark in the global marketplace and fortify our country’s status as a world power.

Making college affordable is one way to do this. Holding down the interest rate on student loans is another.

Dr. Alan Kadish is the president and CEO of Touro College and University System.