Anyone who has attended high school, in the least, knows the demands and importance placed on getting a ‘’good college education.’’ In the 21st century a relevant tertiary education is the key to breaking into the industry of choice. Unfortunately, as academics grew in popularity so did the cost of education. This progressively led to the current state of affairs in which most students will access some sort of student funding to go through their college years. While the prospect of ‘free money’ to unlock your dreams sounds like a great offer, it may not always be what it’s cut out to be. Numerous graduates find themselves massively indebted and the best they can hope for is to get well – paying jobs to offset the debt.
The question then sits around how to pay off student debt without breaking the bank. Fortunately the powers that be put in place a few instruments by which one can make right with their financial obligations. One popular method of doing this is the Graduated Repayment Plan. In this case the student has to pay back the loan in agreed installments that increase every couple of years. The assumption is that as one gains experience and mileage in a particular occupation, their earning potential also increases, allowing them to pay off a bigger proportion of their debt. In the early years one just pays off the interest and this eventually expands to accommodate interest. While the initial payments are small, one ends up paying much more in total.
Another popular method of paying back student loans is the Income – Based Repayment Plan. In this case the amount paid is calculated as a percentage of salary earned. This is particularly good for individuals who have taken partial financial aid. Using this method, the only thing that may be required is to be frugal and strategic about your budgets and financial plans. For as long as you don’t spend beyond your means and make reasonable purchases, paying off the debt may be done comfortably.
The last option to be discussed herein, relates to students whose debt is higher than average. This is usually the case for historically expensive schools or programs. As opposed to most repayment schemes where a student is expected to pay back in 10 or so years, in this case the student has as much as 25 years to make good on their payments. With this option, the interest rate makes it more expensive in the long run, but flexible on a monthly basis.