“Paying off your student loans won’t happen overnight, but you can shorten your repayment period by a few months or even a year or two. How? By using one or a mixture of the methods outlined here. If you have finished school with student loans, you need to pay them off. With the rising cost of education, you may owe a formidable amount of money. It is crucial to develop a plan for repaying your debt as efficiently as possible so that it does not haunt you for decades. Understanding how to repay your federal student loans can save you a lot of time and money.”
The most expensive college in the United States—Sarah Lawrence College, in Bronxville, New York—charges $44,220 a year for tuition. And that doesn’t include fees and room and board, which can cost an additional $14,000. Even more disturbing is that the annual cost of a college education has risen by 130 percent in the past 20 years, according to the College Board. As a result, Americans have racked up about $1 trillion in education debt from both federal and private student and parent loans.
“People are borrowing twice as much as they were a decade ago because grants and scholarships are not keeping up with the escalating costs of college,” says Mark Kantrowitz, the publisher of FinAid.org andFastWeb.com, free online financial-aid resources. To wit: Graduates of the class of 2011 have an average of $27,200 in debt, up from about $17,600 in 2001.
If you’re on a tight budget, it may be difficult to steer any additional cash toward education debt. But you should try to pay it off as early as possible; otherwise it might stick around for a decade or more, which could prevent you from saving enough for retirement. Here are five steps to paying off any lingering loans of your own—and to helping your children settle theirs down the road.