How Much Student Loan Debt Is Too Much?
Taking on too much student loan debt can hurt you decades into the future, and Idaho Title Loans, Inc. is here to tell you how that can be avoided.
The first step is to understand how much student loan debt is too much before discussing ways to reduce your debt burden.
This article will cover those questions and much more, so read it until the end!
Understanding Your Student Loan Debt
You can consider your school debt too much if the amount you borrow is more than what you could expect to earn in your first year working after graduation.
You can find the latest earnings information from government agencies like the US Bureau of Labor Statistics (BLS). They provide plenty of in-depth information about earnings according to different roles and industries.
Better yet, BLS statistics also show how those earnings differ depending on which state you work in.
Like any other form of debt, a student loan is a double-edged sword. It has great potential to help you gain an education and start your life in the workforce.
However, taking on too much debt could hurt you financially. Not only will you struggle to pay off your student loan, but it could also prevent you from achieving other important financial goals like affording a home.
The Dangers Of Taking On Too Many Student Loans
One of the best things you can do for yourself is to understand the long-term implications of taking on too much student loan debt.
Here are four ways that your life can be negatively impacted by excessive student loans
- Cash flow problems: Taking on too much debt means that your regular repayments will be larger in the future. Those payments can take up too much of your income, leaving you without enough money to pay your living expenses.
- Growing interest: Another problem that many borrowers face is growing interest. If you’re unable to make your student loan payments on time and in full, the interest you end up paying could increase over time.
- Delayed goals: The two issues above will significantly affect your other financial goals. For instance, you might have to delay owning a home or starting a family.
- Mental and emotional stress: Lastly, consider the non-financial impacts like stress. Carrying too much debt and worrying about it constantly can affect your overall well-being.
Students should understand these dangers before taking out any student loans. However, people already facing these issues still have ways to fix the problem and improve their financial health, as you’ll see in the next section below.
5 Ways To Minimize Student Loan Debt
You can take steps at any stage in your education to reduce your student debt. That’s true regardless if you’re a prospective student, currently studying, or already graduated.
Here are strategies you can use at every step of the way:
1. Before: Choose A More Affordable Institution
One way to minimize the effects of student loans is to choose a more affordable institution.
Three affordable options for seeking a high-quality education are:
- Community College
- Vocational School
- In-State Institution
These institutions typically charge a lot less, which reduces the amount you need to borrow.
2. Before: Explore Scholarships And Grants
It also helps to seek alternative funding through scholarships and grants. Check with the institution itself, as well as government agencies and charitable organizations.
3. During: Work Part-Time While Studying
Students who are already studying can also minimize the effects of their student loans by working part-time. The money generated can reduce their student loan burdens for when they graduate and begin working. You can even look into a work-study program that helps with tuition while you are still working toward your degree.
4. After: Prioritize Eliminating Student Debt
Upon graduation, you should already begin prioritizing the elimination of your debt. Paying it off as soon as possible will enable you to shift your focus to your other financial goals.
One tactic you can use here is to make as many extra payments to your student debt as possible once you start earning.
5. After: Use Other Money For Emergencies
Paying off student loan debt will take time. So, it’s crucial to ensure that nothing interferes with that process, like a financial emergency.
If a financial emergency occurs consider using other money to cover the costs. For example, you can borrow up to $15,000 through a title loan to pay for your emergency instead of using money saved to pay your student loans faster.
Title loans only require your lien-free car title as collateral. Besides that, you’ll need a valid driver’s license or state-issued ID and your car for a brief inspection.
With these loans, approval is not based on your credit or reported to credit agencies, like Transunion and Equifax.
Get Title Loan Help With Idaho Title Loans, Inc. Today!
Don’t let excessive student loan debt hold you back from living your best life! Do what you can to minimize the amount of debt you take on, or follow the strategies above to pay off that debt as quickly as possible.
Rest assured that Idaho Title Loans Inc. is always ready to help you access emergency funds through a title loan. Start anytime by filling out the short online request form with your information, and one of our representatives will call you back soon!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.