How student loan debt rose to $ 1.6 trillion and what debt holders can do to reduce their debt

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Student loan debt has skyrocketed over the past few years. One expert provides ways to reduce your debt burden. (iStock)

Since 2003, total national student loan debt has grown by 602.5% to nearly $ 1.7 trillion. according to educationdata.org… Even after adjusting for inflation, the total student debt of Americans grew by 389.5% during the same time.

According to the data, the average student loan debt was about $ 36,900 at graduation in 2021. That’s an average monthly payment of about $ 433, a 76% increase over 2000 graduates.

If you have a private student loan debt that you are struggling to pay off, consider refinancing your student loan to lower your interest rate. Borrowers can use their monthly savings to pay off their student loan faster and pay more towards the principal balance of the loan rather than paying additional interest. Visit Credible for your personal rating and see how much you can save.

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How to avoid student debt

As student loan debt grows, students can take several steps to avoid additional loans:

State college: Go to a public college and consider starting with an associate degree from a community college. This will save money before transferring to university. Plus, living at home versus a campus can save students thousands of dollars each semester.

Federal loans: Take out loans using federal direct loan, which offers lower interest rates and more flexible payment options and has the potential to qualify for any future student debt cancellation. And on unsubsidized loans, interest is charged only after graduation. These loans also qualify for benefits such as COVID-19 abstinence programs.

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Private loans: While federal student loans have the best options, they also have limits on the loan balance that borrowers can borrow, and not all borrowers qualify. In addition, student loan rates are currently at historically low levels, so now is a great time to get a private student loan. Borrowers who already have private student loans should consider refinancing to lower their interest rates and lower their monthly payments.

If you have private student loans and would like to review your refinancing repayment options, visit Credible to compare interest rates from several lenders at once.

Steps to Reduce Student Loan Debt

While taking on student debt, student loan borrowers can consider the following steps to reduce their financial burden:

  1. Refinance student loan
  2. Pay more than the minimum
  3. Sign up for auto payment

Refinance student loan: Refinancing your private student loan allows borrowers to change the terms of the loan in order to pay off their debt faster and lower their interest rates. With historically low interest rates, student loan borrowers can lower their monthly payments and pay off their principal faster. Visit Credible to get pre-approved in minutes without affecting your credit rating.

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Pay more than the minimum: Interest is charged on the principal balance of the loan amount, therefore paying the amount in excess of the minimum monthly payment will reduce the debt faster and save the borrower’s money over the life of the loan. By reducing the balance of the principal amount of the debt, borrowers reduce the total amount of interest on the loan.

Sign up for auto payment: Often student lenders give borrowers a discount on their interest rates if they sign up for automatic payments. Borrowers should contact their lender or service agent and inquire about discounts when signing up for auto payment. They can then apply additional savings to their core balance sheet.

If you want to pay off your student loan faster or just want to save on your monthly payment, contact Credible to speak with a student loan specialist and get answers to all your questions.

Have a financial question but don’t know who to contact? Write to a safe money expert at moneyexpert@credible.com and your question can be answered by Credible in our Money Expert column.

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