Are you a student in Oregon with student loans and a part-time job? You could pay off your loans three times faster than your peers by doing just one thing. Let me fill you in on this little secret.
But first, why would you want to pay off your loans three times faster than the normal Oregon student? I can give you a few reasons, but I’d love to hear your ideas too. Leave a comment and join the conversation.
Most of the time, Lenders expect full repayment to occur in about 10 years after graduation. That’s not bad, you may think, but this is a misleading figure. The majority of students take between 15 and 20 years to repay, if they repay at all, due to deferment or forbearance for lack of employment or going back to school, default issues, and other life reasons.
Ready, Set, Go!
The only way to know you’re going to reach paid in full status to take action now. This is especially true if you’re still in school. Over the course of your education, small choices you can make right now add up to huge savings in the long run. And nobody wants to skim right off the top of their first “real” paycheck to pay on their student loans, or have several hundred dollars in payments when you are trying to buy a home, start a family, or launch a business. Basically, student loans just get in the way after you take your diploma and shake the president’s hand. Don’t let your springboard become a stumbling block, start doing this one thing that will help you pay off your loan quicker than anyone else:
Work one more hour per day or five more hours per week.
Let’s look at some numbers: Most students in Oregon graduate in 5 years, will have around $30,000 in loan debt, and works 20 hours per week at one or more part-time jobs. Most of these students earn minimum wage, which in Oregon right now is around $9.10 per hour.(Wage per hour x hours per week x weeks per year x years in school = $47,320 at 20 hours per week vs $59,150 at 25 hours)
Simple arithmetic yields the realization that a student working 25 hours per week instead of 20 makes $11,830.00 more over the course of 5 years.
That’s more than a third of the average student’s debt!
Your ticket to above average is one hour per day or a five hour weekend shift. Imagine the huge payoff from such a small sacrifice. This doesn’t even consider additional summer work, higher wages, or other income! Join the Extra Hour Club and knock out your loans with surprising speed!
Are you ready to take just five more hours per week to pay off your loan 3x faster than your peers? Awesome! But what do you do with that extra money now that you’re earning it? You want to make sure your hard work is actively propelling you toward your goal, so you have a few options:
Each paycheck, move a portion of your earnings to a savings account that you will only access when you graduate. This is simple, secures your money, and ensures you’ll be able to knock out a huge chunk of your loans whenever you need to. The downside is that loan interest will accrue as you’re saving, so the total effect may be less over time.
Live On It
An ideal way to owe less at graduation is to borrow less each term. Replacing borrowing with this income from your extra work is a great way to reduce your total debt. Find out how much you’re borrowing per week (total loan for the term / weeks per term) vs how much more you’re making now and reduce your term’s loan amount accordingly.
Pay With It
Pay on your existing loans each month with this money to combat interest and reduce your principle balance while in school. This is also a great way to get in the habit of paying more than your minimum loan payment and get proactive about your money.
I’d recommend doing a combination of the above: save a portion of your extra income for emergencies and a “happy graduation” loan payment, reduce your borrowing by another portion, and sending in a portion to your lender every month. Whatever your choice, making sure you take follow-up action to proactively attack your loans will ensure your hard work is well worth the effort. Working hard and getting free from student loans requires discipline and planning. I know that you can do it!
If you’d like to make even faster progress toward your goals, get a personalized financial roadmap for funding your education and destroying student loan debt. Click the button below to contact Debt Freeks and start your journey to financial freedom!
Until next time,
Do Brave Deeds and Endure!
– Ben at Debt Freeks