7 min read
By Kevin Coval, Student Loan Hero
How do I pay back my student loans?
I graduated college two years ago and my first job wasn’t paying nearly enough to cover my bills. My mom suggested that I start repaying my student loan debt instead of spending money on rent. I started applying for jobs and eventually landed a position at a well-known retail company. But just because the company was reputable didn’t mean they paid me what I deserved. In fact, I ended up making less than minimum wage. So, I decided to try something different. Instead of working 40 hours a week, I cut back to 30 hours and continued to apply for jobs. To make things worse, I lived off campus and had to spend over $70 a month commuting only to work an extra hour each day! Needless to say, getting out of bed in the morning was not fun. Thankfully, I got hired at a smaller company where I worked about 20 hours per week and still managed to save some money. I even went back to school to get my MBA and started working full time again. And guess what…it worked!
What are the best ways to find good paying jobs?
When looking for a job, you want to research the companies you apply to and look for their corporate social responsibility (CSR) reports. You may be surprised by how much information these reports provide. Not only does CSR help tell you if a company is ethically sound, it can also give you an idea of whether or not the company pays its employees fairly. If you notice a pattern of low wages, ask them if they offer any salary management programs or incentives. A great resource for finding a career fair is www.careerfair.org. Another good way to find a job is to go to Career Fair Weekends. These are usually held near schools and colleges throughout various cities. There will be booths set up with recruiters who are willing to answer questions and share their experiences. Don’t forget to check local newspapers and online news sites too. Companies often advertise jobs there.
How do I repay my student loans?
Once you have been employed a while, you may be eligible to consolidate your student loans. To qualify, you need to meet certain requirements including having no defaulted payments under ten years, being enrolled in a repayment plan with payments greater than 10% of your discretionary income, and having at least 12 months left on your original payment period. Once you have been approved, your lender will consolidate all of your federal loans into one principal and interest payment. Then, once you complete your plan, you will be able to pay off your consolidated debt with a single monthly payment. This means that you don’t have to worry about paying separate fees for different types of plans. Also, since you won’t be making individual payments, you might find that your interest rate decreases simply due to the number of payments you are making. However, remember that consolidation isn’t free. Your new interest rate will be based on current rates, and you may end up paying more in total interest depending on your situation.
Do I need a degree to get a high paying job?
Yes and No. Yes if you want to land a job in higher education. No if you want to land an entry level job. Sure, earning a bachelor’s degree can lead to higher paying jobs, but many employers actually prefer hiring someone without a degree. That said, you should think about earning a Bachelor’s Degree if you plan to make a career change down the road. Having a degree lets potential employers know that you have the knowledge and skills necessary to succeed in a position that requires those traits. Plus, your degree can open doors for you in the future.
Student Loans Net
Student loans provide access to finance and education. Many students who attend college need student loans to cover their tuition costs. Students often take out federal PLUS loans to cover room and board costs and private loans for books, transportation, personal items, and other expenses. Students can use these funds to pay for school while they work toward degrees. However, many graduates struggle to repay their loan bills once they graduate.
Average student loan debt – According to the U.S. Department of Education, in 2017, the average amount owed by borrowers stood at $37,184. About 44.8 percent of borrowers had balances totaling $0; 27.9 percent owed between $10,000 and $25,000; 9.8 percent owed between $25,001 and $50,000; 6.7 percent owed between $50,001 and $100,000; and 8.8 percent owed over $100,000.
Borrowing patterns – In 2015, total outstanding student loan debt was about $1.43 trillion, according to Federal Reserve data. In 2017, the largest share (27%) came from undergraduate borrowers. Private student loans accounted for 37% of the total. Federal Direct Subsidized loans totaled 22%, followed by Federal Direct Unsubsidized loans (19%). Other forms of government-backed loans accounted for 17%. Of the borrowers who received student loans, 61% defaulted on their payments within five years.
Student loan forgiveness – If you have a low monthly income, the College Grants Network may help you qualify for public service loan forgiveness programs. Under the Public Service Loan Forgiveness Program, qualified borrowers may forgive their remaining balance after making 120 qualifying payments. Eligibility requirements depend on which program you apply for and how much you owe. You can find information about all of them here.
Default rates – In 2016, the default rate for federally guaranteed loans, including subsidized and unsubsidized loans, was 4.57%. As of December 2018, the default rate for all types of student loans was 4.75%. While this number may seem small, it’s actually higher than the default rate for mortgages (2.87%), auto loans (3.52%), and credit cards (6.36%).
Student loan interest tax deduction – Interest paid on student loans counts towards your taxable income. If you itemize deductions, you can deduct your student loan interest on your taxes. That means if you make $30,000 and pay $500 in interest each month, then you could save approximately $1,200 per year in taxes. The IRS says you can only claim this deduction if your gross income (the total money you earn) is less than $80,000.
Income tax savings – One benefit of paying off your student loan faster is that you may be able to write off some of those payments as a business expense. Paying off your loan early can also reduce future tax liability. Depending on your state of residence, you might even get a refund. These refunds may not be as big as what you would receive after you file your taxes, but they do go towards your net income.
Student Loans Net
Student loans net
The student loan net is the total amount of federal government student loans outstanding minus the current repayment balance for borrowers who have entered repayment at least six months before the data was collected. As of 2015, total U.S. student debt had eclipsed $1 trillion. On average, students borrow about $37,000 per year to attend college, according to the New America Foundation. The number of people who owe money on their student loan bills has decreased since 2008; however, the overall amount owed each month continues to rise.
Average student loan debt
In 2011, the average student borrower owed just over $30,000 after accounting for interest payments. That figure increased to almost $40,000 in 2012 and has risen even higher since then. In 2016, the average student loan balance was reported to be $38,172, according to Federal Reserve Bank of New York.
Number of student loan borrowers
There were 44 million borrowers of student loans in 2017, according to FedLoan Servicing Partners. The number of borrowers has been declining since 2005, when there were 52 million borrowers. At its peak, there were 56 million borrowers in 2007, according to FedLingo.
As of 2018, the Federal Reserve estimated that the national debt would reach approximately $22 trillion by 2028. While the growth rate has slowed, it is still projected to continue rising until around 2050 when it will exceed $100 trillion. In comparison, student loan balances reached $1.15 trillion in 2016.
Student Loans Net
**Legal Disclaimer** (Not Legal Advice)
Student Loan Debt not paying off? Take control of your money! Student loans net may work for some people but it certainly won’t work for everyone. I’m just covering the basics like interest rates and how to get out of debt. Hopefully these tips will help you earn more income than what you owe.
I know my way of explaining things doesn’t do justice, but if you want to learn more about the topic I had fun researching.
Student Loans Net
Student loan debt
In 2017, student loans were at $1.45 trillion. That was a record high. And the number keeps rising. In 2018, student loans hit $1.52 trillion.
But here’s what makes this statistic even worse: it’s not just students who have student loan debt. About 42 million Americans carry student loan debt. So if you think you don’t owe $50,000 in student loans, guess again.
The average monthly payment for student loan borrowers is about $500 per month, which means it would take about 40 years to pay off a current balance of $40,000!
There are many reasons why people borrow money to go to school. But some of the biggest misconceptions are that they get good jobs afterwards or that their parents will help them out later in life.
Unfortunately, neither of those is true for everyone.
Students often borrow hundreds of thousands of dollars before attending college. Plus, they might need to work while they’re in school to make ends meet. Most students have no idea how much they’ll actually owe after graduation — and that lack of information can lead to financial problems.
And then there are the hidden costs of borrowing money. Like paying interest on top of the original amount borrowed. Or having to use private lenders instead of the federal government.
Plus, student loans aren’t dischargeable through bankruptcy. Which makes sense, since it’s considered a form of credit — something you use to buy things. If you default on your payments, you could wind up being sued or losing your house.
That�s why it’s so important to understand student loan debt.
This video looks at the issue of student loans, including some solutions to avoid getting trapped.
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