“Head-On” Approach Best Strategy for College Loan Debt
Compass Financial Group financial planner gives college students some advice
SIOUX FALLS, S.D. – After years of hard work, many college students have not only been achieving in the classroom but also accumulating debt.
The average US student pays about $33,000 in student loans upon graduation.
But, there are a few programs to help students set affordable monthly loan payments, such as:
-Revised Pay as You Earn Prepayment Plan (REPAYE PLAN)
-Pay as You Earn Repayment Plan (PAYE Plan)
-Income-Based Repayment Plan (IBR)
-Income-Contingent Repayment Plan (ICR Plan)
However, these programs only apply to federal student’s loan.
For private loans, financial experts say to consolidate them.
“It could be with the university, could be with a local bank, you have the ability to consolidate those loans as long as your credit score is reasonable,” said Jesse Haller, Compass Financial Group financial planner.
The average college student will pay student loans for about 10 to 15 fifteen years after graduation.
With all the programs that are offered, the best one just might be the simplest; the snowball effect.
“You start with the smallest debt and you just work your way up to the largest debt,” said Haller. “Everything that you were able to save plus roll it right into the next one, the next one, the next until you’re debt free.”
Some other strategies would be for parents to start saving before students get to college, and also have students in work-study programs while still in school.