In May of next year, I will be graduating from a Midwestern university with a B.A. in Political Science and several federal and private loans to the tune of approximately $60,000. Yikes. As you can probably tell, college has ravaged my monetary situation. I got an awesome education, but 60 grand is still an enormous sum... To make things worse, I only have a few thousand dollars worth of savings that I've managed to accumulate while in school.

So my question is this: leaving aside how I managed to rack up $60k in loans for a B.A., what is the best way to eliminate this debt? I need your help GRS!

Stop paying it. That seems to be all the rage these days.

Umm....live on bare essentials, get three jobs, pay off the debt. Did I miss anything? If this fails, then go with sdogg1m's suggestion.

Suggestion #1 works great if you find an overseas job and overseas spouse.

There really aren't any "special tricks" to paying off your loan. Live frugally and don't get into credit card debt. Create a budget and figure out how much extra money you have every month to make additional loan payments (paying at the least the minimum is a given, of course). Good to hear you have a few thousand in savings, meaning you are way ahead of many grads! Since you already have an emergency fund that frees up more of your income to put toward your debt payments. My guess is the private loan has the highest interest rate, so for now put more money toward the private loan and pay the minimum on the federal loan.

Try not to stress out too much over the loans either. Student loan debt is a much better beast to deal with than credit card debt. Hopefully your degree has helped you find a decent job with a decent salary so that your loan payments won't feel overwhelming.

Try to live on the very least you can for a few years and you will get it paid off quickly. The more determined you are, the faster it will get paid off. Sacrifice now, will pay huge dividends later.

Start looking for a job in your field NOW. Volunteering is a great way to get the experience everyone will tell you need, and its a good way to get connections. I don't know how many people graduate uni only to end up working in call centers.

Unfortunatly you are about to find out how much the field has been tilted against you. CNN money ran a story about people who are forced to leave the country because they can't pay the loans off. These people aren't your typical dead beats but simply took private loans out to get a college degree. The fee's and payments were so bad that no amount of payments could ever make dent in them. They were faced with the prospect of paying them off over 30 or 40 years if ever.

And this from here

"Since 1997, student loans have become the most profitable, uncompetitive, oppressive, and predatory type of debt of any in the nation. This has occurred due to legislation that was paid for by the the lobbying machine of Sallie Mae, the largest student loan company in America. Vast personal fortunes are being made by both Sallie Mae executives, and others who paid for this legislation, at the expense of decent citizens who were not able to capitalize on their education. This has effectively crippled MILLIONS of decent citizens who want to repay their original debt, but are prevented from doing so by staggeringly higher amounts being demanded from them by both "non-profit", and for-profit student loan companies. This has truly created a swath of economic destruction across our land."

and

"According to Harvard Professor Elizabeth Warren in a Wall Street Journal piece by John Hechinger last year, "Student-loan debt collectors have power that would make a mobster envious."

It should be noted that this is a very hot topic around cyberspace, so expect loads of flaming between bits of usefull information. Do post back and let us know how it works out for you.

With all the talk about the need for getting a college degree this is what most people don't realize



30 YEARS!!!!!

My advice, skip univeristy and go straight to Walmart, work hard and you get further ahead than you ever would with a college degree, at least not when you have debts like that.

It's hard to find a well balanced take on student loans (as I mentioned its quite a hot topic) but this guy does a pretty good job, the quote above is from his blog.

http://mrcheeseburger9000.wordpress.com ... d-to-take/

BTW there is a big difference between Federal and Private loans

Live up to your financial obligations and pay it back once you find a good job.You cannot discharge a student loan in bankruptcy.You will owe the money until the day that you die.Lay off the flat panel televisions,fancy cars and vacations.Live below your means for a few years and pay the debt off.You'll become a better person at the end.

Continue to live like a student on a student's budget for the next 5 years. Don't run out and get a new car, don't run out and buy a bunch of furniture, watch your entertainment expenses closely, keep your living costs low by living with a roommate. Don't add to your debt by taking on more loans (i.e. car or grad school) or by using credit cards.

The first thing you need to do is get a job. Once you have a job, create a budget or spending plan, pay your household bills, give yourself a small allowance for discretionary spending (i.e. grocery, entertainment, clothes, etc.) and throw the rest of your money at your highest interest loan while making minimum payments on the rest (or you might want to start on your smallest loan - i.e. Dave Ramsey snow ball menthod). Automate your payments as you may get an interest reduction. What about consolidation to one loan at a lower rate - I would research this carefully as my recollection is you can only consolidate once.

I'm with Sam - continue to live like a student. You're already used to it, so it shouldn't be too painful, as long as you do it right. If you've got a few friends who want to live inexpensively too, you might look into renting a house together.

This will open up other options that will help you save lots more money. If you've got a bit of land to work with, you'd be amazed at what a small garden can produce for you. I planted eight tomato plants this year, and ended up with more tomatoes that I could use! If you plan it properly, a small garden can save you some money, as well as being fun to work on. Sure, it won't save you a ton of money, but everything you save and use to pay down your principal now will save you a bunch of interest over the life of the loan. It'll also encourage you to eat healthy foods, which will help keep you in good shape and save you bills and lost time due to medical problems.

Also, look into learning to do things yourself that will save you significant chunks of money. I figured that working on cars would be fun, so I decided to learn how to do it. The last couple of cars I've bought have been under $1000. These weren't junkers, either. I've ended up driving them all for quite a while and I've never had a breakdown. I like to scour craigslist for deals because often you can find a car that someone is trying to get rid of cheap because they picked up a new car. Or, other times, a car will need something like a brake job, and when the owner takes it into a dealership they're quoted more than $1000 for the work. This causes them to figure the car just isn't worth it, so they go out and buy something newer and try to get rid of the old car for much less than it's worth. This idea is contingent on knowing someone with a bit of automotive experience who can lend you a hand when you need it. You can learn a lot just by following your car's Chilton's/Haynes manual, but there will be times when you need to ask for advice. I guess if you live somewhere with great public transit, this idea probably won't help you much, though.

Finally, make sure you don't nickel and dime yourself to death! Many people stop for a daily coffee, buy a newspaper, and maybe buy a snack or two at the convenience store on a daily basis. While these expenditures might seem insignificant, over time they add up to thousands of dollars. Even worse, they don't do much to add to your quality of life and wasting money like this could add years to the time you'll need to pay off the loan. Don't get me wrong; I've got not problem with little expenditures like this if you can afford it, but unless you get an amazing job upon graduation, you won't be able to afford it.

I don't mean to make it sound like you'll need to live a boring, miserable life while you're paying off your debt. Just try not to get caught up in the "more is better" philosophy. You'll undoubtedly have friends who graduate and begin spending like drunken sailors because they feel an urgent need to get their life started. Don't be like them. Just stick to your desire to get rid of your student debt and you'll come out ahead in the end.

I'm a few years out from where you are but with no private loans and International Affairs instead of Poli Sci

I would look into consolidation and do all your homework if you have time now. I'm not sure now is the right time to pull the trigger on a consolidation but you should be ready to do it when rates are good. The majority of my loans are at 3.25% fixed with a single lender. It makes thing easy to manage and easy to keep tabs on.

I would also treat your federal and private loans differently. Federal loans generally have more wiggle room in terms of payment options and deferment. Especially if you get lock in a decent rate, there is no reason not to just pay the minimum on these and throw extra resources at the private loans.

Also, definitely keep living like a student. I've only really upgraded 4 things since I graduated: food (I haven't eaten ramen in ages), car (it's old but I've never owned one before... it's cool!), cats (it's good to have fuzzy overlords), and wardrobe (only what's necessary for work, not beyond, but having more than 2 pairs of shoes is nice).

I graduated last year with $185,000 in loans, so I can tell you what I am doing about it.

- Basically, as everyone says, I am saving money everywhere I can.
- Every time I get some extra money, I put it into the loans.
- I set up electronic payments for the loans (which are in economic hardship deferment) and I made a budget, calculated how much I could afford to pay on the loans every month. I can even pay amounts as low as $5 at a time.

- Paying off the huge chunk of interest at the beginning was the hardest part since when I graduated, I already had about $4,000 in interest alone. I received some money as a graduation gift and threw it at that.
- Once that was done I identified that the worst portion of the loans, which is at 6.75%, accrued nearly $400 of interest a month. I only pay on this portion of the loans currently, get rid of this first and the rest will come later.
- I made sure that I was paying MORE than that per month so that even if it was only a little bit, every month I knock down the principal. It feels so good to be paying the principal! I refuse to allow the interest to build again because when the deferment ends, the interest will be capitalized, and I will not let that happen! I am slowly, very very slowly, inching the principal down while keeping up with the interest.

- To motivate myself I calculate how much I have saved myself by starting to pay early rather than not paying in deferment.
- I am also calculating the "per day interest". When I started it was $12.71 per day. It makes me happy to see the per day interest go down!

So as people say, there is nothing special about a large debt. But these are some sort of psychological tricks that I use to motivate myself since a "debt snowball" doesn't make sense, and numbers this large are difficult to comprehend. You have to break it down to numbers that you can think about. i.e. $12.71 per day, or $400 per month that I have to get ahead of.

hi hackle577

Nows a days banks and financial instiutions are providing loans for various causes like personal loan, home loan.so choose the appropriate loan where the ROI is low comparitivly. and take some long term repayment plan t pay loan. and you can repay it by doing good jobs.

Hope this suggestions would help you.

Regards.
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