Back to school is an exciting time. But it’s also an expensive one. From books and electronics to tuition costs, students are piling on debt to get an education. So if you’ve taken on back-to-school debt and you’re ready to alleviate it, here’s what you need to know.
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Be Cautious About the Debt You Choose
The first step to eliminating back-to-school debt is by being smart about the kind of debt you take on in the first place. Shop around when you look for everything from supplies to student loan companies. And look for introductory financing offers on large purchases like laptops. Finding an offer for 0% APR for the first 12 months gives you time to create a plan to repay your debt before the offer expires, which can ultimately bring on less debt from the start.
Calculate How Much You Owe
After you’ve made all required back-to-school purchases, sit down and figure out how much you owe. Make a simple list of all debts to get organized, remembering to include:
● Lender (credit card company, loan provider, individual store, etc.)
● Amount due
● Minimum monthly payment
● Payment due date
● Interest rate
Once you know what you owe, decide on a repayment strategy to use. Two of the most popular are the debt snowball, which starts with the smallest amount due, and the debt avalanche, which starts with the highest interest debt. While both will save you money, the snowball can assist with increasing motivation by getting you a small win fast.
Figure Out What You Can Afford to Pay
While in school, you may be extremely limited on what you can afford to pay each month. But it’s important to be honest about how much you have to allow you to look for ways to bridge the gap if what you can afford doesn’t meet your monthly minimums. So if you’re lacking in funds to cover the back-to-school debt, think about:
● Taking on a part-time job to earn extra cash.
● Developing a side hustle that aligns with your major to make money while gaining real-world experience.
● Talking to your parents about getting help in exchange for a lump sum payment once you get a job after graduation.
● Use a tax refund, rebate check, or any other found money to pay toward debt.
If managing many back-to-school debts becomes too much, debt consolidation is an option that can result in lower interest rates and the simplicity of one single payment. But you’ll need a solid credit score to qualify for a great rate. So if you’re still building credit, you may want to talk to a parent or guardian about co-signing on a debt consolidation personal loan.
Ask for Help
If you’re in a spot where you know you won’t be able to make payments on back-to-school debt, it’s best to talk to your lenders first. Plus, many schools offer financial resources for students that extend beyond tuition aid. There is no shame in seeking assistance for your finances, especially if it means it can help you get out of debt faster.
The Bottom Line
There are tons of expenses associated with going back to school. But any debt you need to take out for education doesn’t need to hang over your head for years. To quickly eliminate your debt, get organized, know what you owe, develop a repayment strategy, and stick to it. It may take some time to see progress, but sticking with the plan will be worth it when your back-to-school debt is in the rearview.
Brooke is a freelancer who focuses on the financial wellness and technology sectors. She has a passion for all things wellness and spends her days cooking up healthy recipes, running, and snuggling up with a good book and her fur babies.
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