18 JANUARY 30, 2020 RIDGEWOOD TIMES WWW.QNS.COM
Student loan debt is a big concern
for today’s newly minted college
graduates.
According to an analysis of government
data by Edvisors.com, a website
that provides financial information
about college to students and parents,
the average student in the class of 2015
will graduate with more than $35,000
in student debt. That fi gure is roughly
$2,000 more than the class of 2014 graduates
faced upon receiving their degrees.
With such substantial debts, it’s no
wonder many college graduates fi nd
themselves looking for ways to pay down
that debt as quickly as possible once they
leave campus life behind. Paying down
college debt may seem daunting at fi rst,
but the following are some ways for
recent grads to get out from under that
debt sooner rather than later:
PAY MORE THAN YOU
OWE
The best way to reduce the principal
on student loans quickly is to pay more
than you owe each month. Once the repayment
grace period ends, grads will
see what their monthly student loan payment
is. Paying more than that amount
each month can drastically reduce your
repayment period, and you will pay
considerably less in interest over the
life of the loan.
For example, a graduate who owes
$25,000 and pays six percent interest
annually for 10 years will pay roughly
$278 per month to eliminate that loan in
exactly 120 months.
Over those 120 months, grads will
have paid more than $8,300 in interest
in addition to their $25,000 principal.
However, grads who pay an additional
$50 per month will pay their loans off
nearly two years earlier and pay nearly
$2,000 less in interest over the life of the
repayment.
ARRANGE FOR AUTOMATIC
DEPOSITS INTO A
REPAYMENT FUND
One of the more difficult parts of
repaying student loans for recent grads
is setting aside enough money to pay
them off . Upon landing their fi rst professional
jobs, new grads are oft en making
more money than they’ve ever earned
in the past, and many have no idea how
to manage their newfound fi nancial
windfalls.
In addition to making your monthly
payments via your everyday checking
account, arrange for automatic deposits
into a savings account you will exclusively
use to repay your student loans so
you are not tempted to spend that money
on more frivolous pursuits. You won’t
miss the money if you never get used to
having it, and you will celebrate the day
the balance in your student loan savings
account matches the payoff amount on
your student loan balance.
MAKE PLANS
Failure to make a plan is one way to
miss the opportunity to pay off your
college debt as quickly as possible. Make
specifi c fi nancial goals, such as owning
your own home in “X” amount of years or
saving money for postgraduate tuition.
Having specifi c goals and plans in place
can provide the motivation you need
to pay down college debt sooner rather
than later.
Student loan debt intimidates many
recent graduates. But those who stay
disciplined can repay their loans quickly
and regain some fi nancial freedom as a
result.
EDUCATION
How to quickly pay down college debt
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/Edvisors.com