The typical college student in the United States has a student loan just below $40,0001.
Many people find relief with debt settlement companies likeFreedom Debt RelieforNational Debt Relief.
But a lot of this can be avoided in the first place if you learn about debt in college.
No one wants this massive weight on their shoulders just as theyre beginning their professional lives.
Though some debt may be unavoidable, that hole will grow with time if youre not careful.
Thankfully, theres help to be had.
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Most debts will involve interest rates, or a charge for the privilege of borrowing money.
High rates mean it is more expensive to borrow money, low interest rates are less expensive.
Student Loans
Student loans have been in headlines for a few reasons.
Millions feel anxiety or depression4over the daunting task ofpaying back tens of thousands of dollars.
They even picked back up in 2023 after a three-year-long break due to the pandemic.
There are several ways to lower or avoid accruing student loans.
If you do find yourself with a hefty student loan, there are a few ways to handle it.
IDRs base your payments on your stated income and family size.
For some people, this can lower your payment to as low as $0.
It is important to remember that IDRs will be reviewed annually for changes in income.
The four plans are:
Each plan has different qualifications for eligibility.
The Federal Student Aid office has developed a simulatorhereto help determine what plan is right for you.
There are also several opportunities on the books for student loan forgiveness.
That will forgive remaining loans after 120 qualifying monthly payments or 10 years of payment.
All IDR plans will also forgive remaining loans after 20 to 25 years of qualifying payments.
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Credit Card Debt
Most people get their first credit card shortly after high school.
Having them is not only useful, but almost necessary.
Credit cards also can help with emergency purchases when youre short on money.
They often use sign-up bonuses and low requirements to entice students because they are an ideal customer.
Keeping this in mind, be wary of offers from credit card companies.
Lets say you have already spent yourself into substantial credit card debt.
The most important step is to stay on top of payments.
There aremany methods for paying off credit card debt, but the principles remain the same.
If you have multiple types of debts or credit cards, prioritize what has the highest interest rate first.
Also, do not be tempted to use money from your loans to pay for your credit card debt.
At worst, that could be a violation of the agreement.
At best, you are merely moving money from one debt to another.
Auto Loans
Learning to drive and getting your license at 16 is an American rite of passage.
Your first car represents your first taste of real freedom and the ability to go wherever they want.
Its an alluring notion, but cars are expensive.
They also are only getting more expensive with time.
Thats why some debt in college comes from a car payment plan.
They are all specifically designed for students with bad or no credit in mind.
However, car dealerships will view college students as ideal customers the same way that credit card companies do.
They figure they will most likely have someone else to bail them out if the payments become too much.
Avoid any plans or offers for financing a new vehicle if you are looking to save money.
Used cars often are more affordable, butbuying a used caris not without its own perils.