Reducing levels of student debt is a hot-button issue in the U.S. as college tuition costs continue to rise.
It seems that everyone has an opinion on how to reduce student debt, including the President’s daughter, Ivanka Trump.
Ivanka’s proposed “new solution” involves limiting the types of loans available for:
- Parents of Undergrads
- Grad Students
The idea behind this plan is that limiting choices for loans will eventually lower tuition costs. If this strategy doesn’t seem likely to work for you, you can check out these financial alternatives to Ivanka’s “new solution” to reduce student debt.
Can You Avoid Racking Up High Amounts of Student Debt?
Nationwide, student loan debts have risen to around $1.5 trillion. This crushing amount of student debt is spread out among 44 million people, with Millennials carrying around $36,000 a person, on average.
You may be able to reduce some of your student debt before it ever accrues by focusing on options for:
- Financial Assistance
- Merit-Based Aid
Many students also choose to begin their education at a community college to reduce some student debt right off of the bat.
How Can You Deal with Student Loan Debt?
What if you already have extensive amounts of student debt? None of us can go back in time, but there are some ways you can reduce your student debt, even after taking out loans. You may want to consider:
Refinancing Your Student Loans
Student loans can come with high interest payments. These payments can be especially harsh if you have multiple student loans. Refinancing and consolidating all of your loans can lower your interest payments. It can even lower your monthly payments.
Focus on Income-Driven Repayment
Income-driven repayment (IDR) plans may allow you to spread out your student loan payments, lowering your bills to a manageable level. IDR assesses your monthly income and then sets a rate for your payments. However, it will not reduce the total amount of debt you have to repay.
Pay a Lump Sum Towards Your Student Debt
A lot of the expense of student debt comes from interest payments. You can end up paying thousands of dollars above your principle – or the amount of money you took out with the loan – as interest payments add up.
Paying a lump sum towards your loans can reduce the interest you have to pay. You should consider paying directly towards your principal if you get:
- A Large Bonus at Work
- Money from an Inheritance
- Other Unexpected Income
You may even want to take out another loan to pay directly towards your student loan debt. Personal loans from credit unions and banks may have much better interest rates than your student loan debt. Some people will wait until tax season for their tax refund and find that they didn’t get any back so they decide to look for money in other ways.
Instead of sitting in hopes of getting a tax refund, as an alternative you may want to apply for a title loan online to make a lump sum payment towards your student loan debt, knocking out a significant portion of the money you owe for your education.
Focus on All Your Options for Reducing Student Debt
Reducing student debt is a major issue for a lot of people in the U.S. If you need to lower your student loans you can consider refinancing, consolidating, and making lump sum payments. You can also avoid generating high levels of debt by carefully considering your options to reduce tuition costs during college.
These steps can help you reduce student debt while politicians discuss both old and new solutions to rising tuition costs.