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How long will it take me to pay back student loans?

Loan amounts are huge, how will I be able to live and pay back the loans?
#money-management #finance #college #student-debt #student-loans #loans #debt

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Ann’s Answer

Hi Nick,

I know that student loans are overwhelming. I am still paying off mine. The answer to your question is that it depends. My first piece of advice is to only borrow what you absolutely need. A lot of students will take the maximum amount allowed in stipends, and this will only increase the amount of debt you owe at the end. I also recommend going to the website fsa.ed.gov. This site gives you are breakdown of the different repayment programs the government offers to students that borrow federal loans. Each repayment program has different lengths of time to repay, and in some programs you can have your balance absolved if you make on time payments for a number of years. This website also has calculators that will estimate your payment and how long it will take you to repay your loans based on the repayment program you opt into. Hope this helps!

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Breanna’s Answer

Nick, this is definitely a common thought most people come out of school wondering. It's hard to give a direct answer, as it depends how much student loans you took out, salary coming out of school, how motivated you are to pay them, ect.

Questions to ask yourself:

  1. How motivated are you to pay off your debt?
  2. What other expenses do you have to take care of (phone bill, gas money, fun money/allowance, ect)? What will your loans payment(s) look like?
  3. What kind of budget are you willing to stick to?

Things to consider/Next steps:

  1. Call your loan companies to calculate exactly how much you borrowed, and how much your minimum payment will be each month. This will give you an idea of what to expect and to start planning ahead of time.
  2. Make a budget and stick to it - don't over commit, be realistic.
  3. Put away as much as you can to your savings - raises, extra income, ect. Then maybe plan on making large lump payments toward a loan(s) every few months.
  4. Don't just pay your minimum payment - make double or triple payments if you are able to.
  5. Look into consolidating or refinancing your loans to see if this will help you out.
  6. Depending your degree, some jobs are eligible to loan forgiveness.
  7. Look into a side job where you can make extra income.
  8. Is living at home an option for a little while to help knock down your loans? Try to find cheaper rent if that is your only option.

Two methods to approach your student loans with - Depending on your loan situation, either are good approaches, its all about personal preference.

  1. Snowball effect - paying the smaller loan first and working your way to the heavier loans. Paying your smaller loans off first give you the sense of accomplishment so you don't burn out quickly.
  2. Pay the loans with the higher interest rate first - this essentially should help pay less in interest if you knock the loans with higher interest rates first.

It's also important not to completely deprive yourself of things and living life when you are paying back your loans. If you only work to pay your loans and don't enjoy life from time to time, you could get burnt out quickly. Be optimistic, work hard, and find what works best for you.