This is a bit awkward… I never went to college. But I am surrounded by the countless friends and relatives who are fighting this ever-crappy commitment of paying off student loans.
Now, this shouldn't be that difficult if you're one of the 7% of people who actually graduated and found a six figure career. But for the rest of America, school debt, and the realistic means to pay it off, are little more than a mere desire.
As of 2012, school debt not only beat out mortgage debt at $1.08 trillion, but a whopping 11.5% of it is more than 90 days delinquent or in default. This is the highest delinquency rate among all forms of debt and the only one that’s been rising consistently since 2003.
Related Article: 4 Rules For Becoming Debt Free by Age 30
So how do you get rid of it? There is no magic ticket, especially because every person's story is very different, but there are a few strategies people can adopt to knock giant chunks out of this burden. And remember, $20,000 of school loans is actually more like $63,000 over 20 years. The sooner you pay this off, the less money you'll spend.
1. Prepare to Sacrifice in Order to Meet Your Goals.
Debt sucks. But you made this decision. I had $20,000 in debt before I was married. Almost all of it from stupid decisions and for things I did not need. But my golden answer was the commitment to pay it off. I broke out the whiteboard and figured out ways to do two things:
#1. Spend less & #2. Make more
From baby sitting my neighbors kids and intense recycling to hard labor on the weekends, I began to make progress. I also shut off my cable, lowered my cell phone plan, never ate out, asked for rides everywhere I went, moved my car insurance to “liability only”, sold everything I could on Craigslist, asked friends to donate things I could sell on Craigslist and even wrote emails to family during the holiday season to explain why I would not be sending cards or gifts.
2. Trade Your Employer A Lower Salary For Help Knocking Out School Debt.
A little secret in the corporate career world is to negotiate a job with a compensation package that includes a monthly or one-time stipend toward your school debt in trade for a lower salary. This will likely require a time commitment on your end, but you'll probably be there anyway. And this doesn't only appeal to large companies either. Many small and medium companies can't afford the salaries for the talent they need. So offering to take a lower wage for a large one-time payment toward school loans, is very possible. It's a write-off for the company and typically costs them less in the long run.
3. Start a Side Business, You Can Do This.
You're a smart person. You have a college degree! There is no reason you cannot start a business. It doesn't have to be big. It could be an Etsy shop selling beanies and soap you make at home. You could start consulting people in the area of your degree. You can organize a paid monthly meet-up for the hobbies you love (15 people at $25/m = $375 per month). Whatever it is, you can do it. And if you could make just $350 per month (which is nothing!) this option alone would pay of your loan in five years.
Lastly, if you know me well, I love to include infographics. I found this while researching for this article and thought you might enjoy it.
Do you have any tips on paying student loans? Let me know in the comments below.
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Some know me as a serial entrepreneur and Founder of Sevenly and StartupCamp, others know me as the guy who can ride a unicycle and still kickflip on a skateboard. I’m on a mission to inspire people. Will you join me?