Six Smart Ways to Quickly Make a Dent in Your Law School Loan Balances
Student loans are the bane of many, but no one has it as bad as law school graduates. Well, maybe medical school graduates, but that’s not the point.
How many more years of monthly payments do you have?
The cost of a law degree is insanely pricey. Depending on the university attended, common tuition costs can range from $60,000 to $180,000—and that’s not including living and moving expenses. As a result, an average 75% of recent graduates will have ludicrously heavy student loans weighing them down as they begin their careers.
Nevertheless, just because the debt exists doesn’t mean it needs to stick with you your entire life. There are ways to reduce and manage student loan debt, as long as you’re dedicated and willing to give up certain luxuries.
Repayment Tips…With Interest
To rephrase Shakespeare: loans suck. In addition to costing you monthly wages, interest fees tend to dig you further in debt faster than you can climb out. That is unless, of course, you know how to get a step up. Below are a few tactics that can be used to not only manage your loans but also to give you an edge to avoid having to pay extra in interest.
- Don’t ignore the debt. Most school loan repayment plans will not begin until a year after you have graduated. However, this doesn’t mean that you should ignore the debt until you get your first bill. By making payments before they are due, you can drastically reduce interest rates when the debt goes into force. This is why you need to begin saving the moment you graduate. Furthermore, if you start early there will be fewer tears shed when you look at your balance.
- Pay off the highest-interest-rate loans first. Don’t be fooled by loan companies that consolidate high-interest loans with lower-interest loans. When you pay, they’ll most likely put the funds toward the lower-interest loan in order to charge you more. You can avoid this injustice by focusing on paying off your higher-interest loans first (even if the lower-interest ones are smaller). It’s better to avoid having to pay interest than it is to get rid of a small loan.
- Pay more than the minimum. Minimum rates are usually calculated to pay off that month’s interest rather than making any headway with the loan itself. If financially possible, pay at least twice the minimum in order to reduce interest rates and pay down the actual principal.
- Take advantage of discounts. Many loan providers have repayment incentives that can help reduce debt. There are potential discounts for accelerated repayment plans, automatic monthly deductions, loan consolidation, etc. Check your loan for discounts and plan options.
- Find a job with student loan enticements. Government and nonprofit jobs offer student loan incentives under the Public Service Loan Forgiveness Program. The program forgives remaining direct student loan balances after 10 years (120 monthly payments) if you’re employed full-time for a qualifying employer.
- Reward yourself for pay-off milestones. Paying off a loan can be draining and monotonous. This is why it is important to reward yourself for certain milestones (halfway there, only one loan left, etc.), in order to remind yourself that there is a light at the end of the tunnel.
Are you making progress with your loans?