Student Loan Debt Solutions

There’s no doubt about it—college is expensive. And if your parents didn’t have a college fund set up for you or pay for it themselves and you didn’t get scholarships or financial aid, your only option is student loans, which means you’ll graduate with a mountain of student loan debt.

According to the Institute for College Access & Success, 68% of graduates from public and nonprofit colleges in 2015 had student loan debt, with an average of $30,100 per borrower. Graduating with debt before you have your first real job has become the American Way. What a way to start adulthood. And the sad part? Unless you are in a specialized field like healthcare, engineering, etc., chances are your average salary might be between $35,000-$40,000 a year…eventually. So by the time you pay rent, utilities, student loan payments, car payments, insurance, groceries and a new wardrobe for your new job, that doesn’t leave much. It’s no wonder people find themselves in credit card debt, which can get so bad it only contributes to the problem.

Student loan payments can get high, and if your salary isn’t that great, you won’t be able to start a savings account or save for your retirement. That’s going to cost you hundreds of thousands of dollars in lost retirement funds when you are old and need it most. If your debt situation is bad, you might file for bankruptcy to discharge your debts. You might also consider student loan bankruptcy, and while not all student loans are eligible to be discharged, many can be reduced or eliminated. It just takes some extra doing to get your student loan debt discharged when you file for bankruptcy, and there are no guarantees it will happen. So what should you do? The one thing you don’t want to do is stop paying them. That can have damaging consequences.

Other Creative Solutions

I have heard of some creative solutions from other readers who needed help paying their student loan debt. One qualified for a line of credit from a bank. She used it to pay off her student loan because the interest rate was so much lower. But be careful. If you go this route you can convert a federal student loan with a lot of assistance options, into a private student loan with less favorable options if you can’t afford it.

Another reader looked extensively to find a credit card that had a 0% introductory rate, no balance transfer fees and no fees for writing a check on the account and paid his student loan off that way. There is a trick to this, however. You should try to have as much of that balance paid off before the introductory rate expires. If you see that’s not going to happen, a month or two before your introductory rate ends, find another card with a 0% introductory rate and no balance transfer fee and repeat the process. This reader did that several times until his student loan debt and a few credit cards were paid off.

And another reader stopped going to college for a couple of years because her student loan debt was getting too high. She got a full-time job with benefits that included paying for college tuition, books and fees at 100% as long as she got an A, B or C in the class. Her work schedule was noon-10:30 p.m. four days a week too. This enabled her to attend school part time in the mornings until she graduated two years later. She still had student loan debt from the days when she was a full-time student, but it was minimal compared to student loans her friends had.

Avoid Student Loans Altogether if Possible

If you’re a parent reading this article and your kids’ college fund won’t be enough to cover it all, encourage them to get scholarships, apply for financial aid and maybe even enroll in a work-study program that might be available through the school. If possible, have them attend a community college the first two years, then attend a university or state school. Encourage them to choose a university with more affordable tuition, or if you live in the same town as a university, encourage them to live at home to cut costs significantly.