How To Pay Off Student Loans (Faster)

The joy of graduating from college can be short-lived once you open your inbox and find an email alerting you that the first payment for your student loans is due. And yes, four-plus years of tuition costs can add up to some big numbers, but if you set some reasonable goals and adjust your spending, you can take on those loans and still find ways to enjoy post-grad life.

Ducks in a Row

In between job hunting or during your first-week orientation, you should figure out a plan for repayment. Gather as much information about your living costs as you can. Pull the paperwork for your loans, rent/mortgage and utilities, insurance premiums (health, car, home) and other payments (vehicle, credit cards, etc.). If you’re unsure about how much you’re spending on things like entertainment and groceries, you’ll need to compile the data for those costs, too.

Lay it all out in a spreadsheet or use an app to give you a clear idea of what you can reasonably spend, save and afford. Once you have those ducks in a row, it’s time to dive in. Give yourself a jump-start by actively finding ways to cut costs.

Start, Snip & Sacrifice

Once you know how much money you’ll have coming and going each month, you’ll be ready to trim some of your expenses. This doesn’t mean living on ramen noodles or with six untidy roommates. Instead, you can:

• Cut the cable. Stream content through Netflix, Amazon Prime or Hulu and pick up a digital antenna for local channels. Don’t be afraid to haggle for the cost of your Internet connection, either.
• Dig it. Want organic veggies? Skip the fancy grocery stores and plant some seeds. If you don’t have the outdoor space, search for local food CSAs in your area.
• Hitch a ride. The daily commute can be expensive. Talk to your co-workers about a carpool or get in some free fitness by biking to and from your nine-to-five.

Once you start looking for ways to save yourself some money, you’ll likely start noticing opportunities everywhere. Further motivate yourself by making it a challenge to put an extra $25 or $50 toward each student loan payment you make. These amounts may seem small but they’ll make a big difference.

To pay off loans quickly, small sacrifices aren’t the only ones you’ll need to make. Look at jobs in smaller communities with a lower cost of living and keep your car as long as you can, even if it’s starting to look a little rusty. For some, the sacrifice isn’t objects, it’s time. A second, part-time job can help you make more than one payment a month.

Repaying your student loans may feel daunting but with some extra effort and a solid understanding of your budget, you can do it. After all, you got through finals week every semester, didn’t you?

How long did it take you to pay off your student loans? Have some tips to share? Tell us in the comment section.

What’s the real cost of tuition?

A college degree isn’t getting any cheaper. And neither is the price of food, medical expenses or just about anything else. The price of tuition is actually increasing four times faster than the consumer price index. Yikes.

If you or your kid are thinking about what’s next in life and feel college might be an option, it’s more important than ever to think critically about what career you want and the smartest way to get it.

The debt being created by tuition prices is a nationwide problem dwarfing that of credit card debt. More than 70 percent of students are graduating with an average of $33,000 in student loans, according to Edvisors.

So what’s the real cost of tuition? Depends who you ask.

A college degree has been valued somewhere between $185,000 (Organisation for Economic Co-operation and Development) to $1,000,000 (U.S. Census Bureau) over a lifetime. However, those figures were calculated based on the economic conditions of past generations. College graduates today probably won’t enjoy the same return on investment.

Some sources claim a degree may even lose the graduate money over the course of a lifetime. As a result of a student loan debt, many degree holders will spend years attempting to pay off debt rather than save and build equity. Be careful about the debt you take on.

Think hard about the career you want – a degree may not be required. Debt can be kept low by attending community college first and avoiding private schools. Talk with parents, friends or trusted adults about options to keep debt low. Whether that means a part-time job or working summers, avoiding student loans wherever you can is a safe way to avoid long-term debt.

College enrollment has decreased for the last three years straight. And while this may eventually mean lower tuition, being smart about the debt you take on to get that degree may save a lot down the road.

Sweet Dreams for the Class of 2032: Saving For College From the Very Start

If you’re a new parent, you’re probably more concerned with getting a good night’s sleep than with how you’re going to put your new bundle of joy through college. But if you start saving now, you’ll be better prepared for the high price of higher education.

Tuition Keeps Rising
According to the U.S. Department of Education, undergrads can expect to pay “$13,600 at public institutions, $36,300 at private not-for-profit institutions, and $23,500 at private for-profit institutions” per year.

The same study found that “between 2000 and 2011, prices for undergraduate tuition, room and board at public institutions rose 42 percent, and prices at private not-for-profit institutions rose 31 percent, after adjustment for inflation.”

And you thought diapers and formula were expensive!

Junior’s Future Plans
If tuition increases continue at this level, today’s new parents could easily expect staggering tuition payments. In other words, start saving for college as soon as possible. By putting away as little as $100 a month into a savings account, you can save nearly $40,000 over the course of 18 years.

The good news is, there are savings resources to help you get there. Missouri Credit Union offers members Coverdell Education Savings Accounts (ESAs). It’s a savings tool that’s exempt from federal income tax for qualified higher education expenses. Some key points to keep in mind when considering an ESA:
• Maximum contribution of $2,000 per year per child under age 18.
• May be used by either full- or part-time students.
• Qualified withdrawals include: tuition, room and board, books, computer equipment and more.

Learn more about saving for college by making an appointment with an MCU personal financial officer.

You may not be sleeping much, but you’ll rest easier knowing that your little one’s college dreams are closer to becoming a reality.