Faster Ways To Pay Down Student Debt
If your kid has recently flown the nest and gone off to college, or they’re planning to in the coming fall, then one big issue is probably weighing on your mind: debt. Student debt is the biggest downside to higher education, and one which won’t go away if you ignore it long enough! If you’re looking to pay off your kid’s student debt as quickly as possible, here are some great ways to do it…
Teach them Good Habits
If you’ve got a little while before your kid actually goes off to college, it’s a good idea to find some time to teach them good financial habits. The smallest of changes in a student’s spending habits can make all the difference to how long it will take them to pay off their debt. You’ve been an independent adult for a while now, so I’m sure you’ve picked up at least a few lessons from your experience in the big wide world. Teach them how to do laundry economically, how to save on groceries, how interest rates work and the ins and outs of student credit cards. They may not take it all on board, but a few good tips can go a long way!
Consider Bi-Monthly Payments
With a typical student loan, you or your kid will owe a creditor one full payment a month. This translates as 12 payments a year, assuming that you make a payment once a month. However, if you turn that into two payments a month, paying down half the monthly amount each time, you’ll be making 26 half-payments a year instead, equalling 13 full payments a year. This will allow you to make one extra payment on the loan without even noticing the pinch! If you or your kid gets paid biweekly, that little extra can also be made to coincide with those months with an extra paycheque, which will make the payments even less strenuous. Round your payment to the next 10 or 100, and you’ll stand to save even more on interest payments. By making smaller payments, but more of them, you’ll be able to shrug off at least some of the strain of student debt.
Giving back to the community through volunteer work is good for your kid’s resume, good for their soul, and can even be good for their outstanding debt. Companies like SponsorChange operate a business model where students can donate their time (in a skilled or unskilled role) assisting with non-profit work in exchange for student loan repayments. This concept is fairly young, and only available in a handful of areas. However, it can still be a fantastic way for your kid to start shaving off their debt. The alternative, and much more conventional option, is simply getting a job! Your kid may want to focus most of their time on their studies, but getting a job and learning about the way a business works is very important in early life. They’ll be surrounded by leads for part-time work they can fit around their studies.