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What to Do About Your Student Loan Debt

Description

Chuck Bentley suggests three things that students can do to alleviate their mounting school loan debt.

A Missouri high school teacher started accumulating student loan debt in 1990, when she first enrolled in college, already married with children. After four years at Maryville University, she had accrued her first $26,278.

After three semesters of law school, a career-path change to teaching — which required more graduate school from 1999 to 2004 — additional loans to cover childcare for her four children, and steep interest rates, she owed $194,603 by April 2005.

One final educational endeavor post-2005 — a Ph.D. program at Texas A&M — tacked on another $7,748 in loans.

It wasn't until this September that she realized the extent of her debt, thanks to a call from her loan provider. After 25 years of not making any payments, her total was a jaw-dropping $410,000.

This is likely 8-10 times greater than her annual salary as a teacher.  Wow, what can she do? What can you do if you have mounting student loan debt? 

First, keep track of how much you are borrowing and set a limit on the amount you borrow compared to your anticipated annual income.  In my opinion, a one to one ratio is the max that you should borrow and in some cases that may be too much. 

Second, check out all federal government's programs such as IDRP, which is new legislation allowing for Income Driven Repayment Plans. 

Finally, avoid trying to escape your responsibility to repay the loan. Bankruptcy does not discharge a student loan, so make lifestyle adjustments to enable you to pay it off more quickly.

 

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