In this day and age, we hope that the government would be doing everything it can to provide education for its people. But this is the country of capital. You can be anything you want, if you can pay for it. Still, many Americans go into debt to pay for college educations that can still barely pay off their loans. Is this the trend forever? The newest tirade on students comes in the form of a nice wish from the Obama cabinet.
The expansion of the income-based repayment program, where even the most burdened borrowers will get little to no help. So how do you get out of debt as a student in 2014, we’ll try to help you out more than the current administration.
You’ve already borrowed everything you can from your family, and they’ve been grateful to help you. But if you’re a graduate, with a mediocre income from your English degree, you’ll want to figure out a plan to get creditors off your back, and repay those dearest to you.
Devise a strategy to tackle your debt.
This means setting aside money in the future, so let’s consider your debt to income ratio. Start rationing what you can, and stop spending the money you can’t afford to. This means cutting down on the unnecessary habits, try to go out less, or if you do, be a helpful friend and offer to be the designated driver. You might not even have to use your own car for this one, once again cutting down on the money you’d spend to go out and be social.
Cut down on credit card use.
Try to carry cash more often as a reminder that you can’t always spend. If you’re spending too much, then you’ll realize it faster. A lot of people have a hard time looking at their bank statements, even when they know their spending is out of control. This is a bad cycle to get into. Make sure you’re looking over your bank statements to you know where your money is going, you can prevent fraud from occurring, and hindsight is always 20/20.
Consolidate your debt into a payment plan.
You can negotiate this with your banks, and creditors, or hire a service to negotiate the debt for you. If you choose a service, they will typically front the debt for you, and devise a payment plan based on your needs. Always be caution with this step, and do your research.
You can also consider debt settlement. You will end up paying the creditor less than what you owe, and this can be a good thing if you are careful to make the correct resolution. However, your credit score will take a serious hit if you decide to go for this option, which can be harmful for the future.
The future is what all of this resolution is for, and planning to avoid debt is the goal. You’ve been in debt. You don’t want to go back. Plan accordingly, and you’ll notice the payoff.
Frank McCourt holds a degree in economics. Since graduating he has working a variety of financial settings. When not working you can find Frank watching B-rate sci-fi tv shows and pretending he knows a lot more about wine than he really does.