So you went to college, partied hard, worked harder and finally graduated. Unfortunately, the only things you have to show for yourself so far are a degree in comparative literature, a profile on Monster.com and $40,000 in student loans. Well, don’t get too down on yourself. In this economy, even people with degrees in traditionally secure fields like accounting and engineering are having trouble finding jobs. It’s almost like the choices made by your parents’ generation set the U.S. on a collision course with widespread unemployment or something.
Unfortunately, this means nothing to your lender. Those student loans are still hanging over your head, and now that you’re officially a graduate you’re going to have to start paying them off. And how does a starving young professional find the money to keep current on their loans? Here’s a hint: they don’t sign up for a credit card. Instead, they get creative. A little out-of-the-box thinking can make loan repayments a lot less painful and a lot more organized. So the next time you’re stressing about cutting a check to your lender, try one of these 6 techniques to help turn your repayment plan into something … well, tolerable.
1) Start a debt registry.
A great way to gain traction on your student loans is to get your friends and family to make payments for you. By joining a debt registry site like Lily’s List, you can ask your loved ones to forget about birthday presents and give you a gift you can really use: help. Debt registries allow money to be deposited directly into your loan account, so there’s nothing tricky about it. Plus, aunts and uncles get an easy out when they’re stuck on gift ideas, and everyone feels good about making a positive impact. After all, isn’t freedom from debt the best gift anyone can give?
2) Move back home.
Yes, moving back in with Mom and Dad after you earn your degree is a slap in the face. It goes against everything you’ve ever worked for. But you have to be realistic here. If you want to pay off your debts before your hair goes gray, you’re going to need to dramatically reduce your overhead, and the best way to do that is by taking rent out of the equation. Shelling out $485 a month for an apartment with utilities translates to $5,820 per year – a nice chunk of money that you could be contributing annually to your loans. On the bright side, you won’t be the only graduate who’s reclaiming the basement to save money.
3) Sell your body parts.
Ah, the dreadful algebra of necessity. It’s hard to imagine a grimmer way to repay your student loans than selling off parts of your body for cash, but you can at least take solace knowing that you’ll be well paid for any bits you decide to give up. It’s illegal to sell any body parts in the U.S. (except for your eggs and plasma, which don’t really count), so you might have to take a trip overseas to really cash in on that spare kidney. Of course, if you’d prefer to just donate your eggs, ladies, you can earn between six and ten grand for that.
4) Freeze your credit cards – literally.
Getting rid of your student loans will only be harder if you’re concurrently struggling to make credit card payments. Even if you’re not like the vast majority of cardholders (you know, those people who revolve their debt), you’re only asking for trouble by keeping multiple credit cards in your wallet. They’re nothing more than an invitation to spend money – money that should be going towards paying off your debt. To deliver yourself from temptation, try putting your cards in a cup of water and then popping them in the freezer. This way, you won’t be able to use them until you’re finally back in the black.
5) Make your lender an offer they can’t refuse.
With so many people defaulting on their loans these days, lenders are willing to make surprisingly decent concessions to guarantee they’ll get their money back. For instance, they might reduce your interest rate if you agree to set up automatic payments from your checking account. Try giving your lender a call to see if the two of you can reach a mutually beneficial agreement like this. Just remember that they’ll never just offer this on their own, so you need to take the initiative to play Godfather.
6) Work a full week like an adult.
Working a full week, as in 40 hours or more, is hands down the best thing you can do to get the student-loan monkey off your back. If you’re a barista at a café and your boss can only afford to give you two shifts a week, then stop complaining about how broke you are and find another job. Seriously. The amount of money that people earn at a single minimum-wage job these days isn’t even enough to cover a year of tuition, so if you want to get out of debt while you’re still young, you need to double down. Sure, working two menial jobs is a lot worse than working just one, but employers appreciate that kind of gumption. It will look good on your resume when you finally find an opening in your field.
Paying off student loans sucks, no matter how you look at it. Until you can get started on your career, you’re going to be eating a lot of Top Ramen, living somewhere you don’t want to live and working a job you hate just to get by. But the harder you work today, the closer you’ll be to financial freedom tomorrow. So keep your chin up, soldier, and use these techniques to help pay of your student loans ASAP. In the end, you’ll be glad you did.
This is a guest contribution from Bill Hazelton, Founder and CEO of CreditCardAssist.com, an industry leading credit card comparison site, where he provides advice for consumers about cash back rewards programs, tips for small business owners about business credit cards and the latest credit card industry news.