Why Cutting Down on Student Debt Is the Most Important Thing to Do This Summer

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While a college education can open doors in the workplace, it comes with a price — one you don't want to be paying indefinitely. Summer break is an opportunity to reduce the amount you owe. Consider using the carefree days of summer to whittle down the worrisome burden of student debt.

Facing the Burden of Student Debt

A recent survey found that more than half of all Millennials graduate with a student debt exceeding $10,000. 20.5% of those surveyed carried a total debt between $25,000 and $50,000. Major life decisions about career, marriage, having children, and buying a house or car were all influenced by the level of unpaid student debt.

On average, it takes 20 years or more for most people to pay off their college loans. Even when your career picks up momentum and you start making ''real money,'' your student debt can cast a shadow on a secure financial future.

The interest rates of student loans tend to be among the lowest of any types of loans. However, the longer you take to repay your debt, the more interest you will have to pay.

Evaluating Your Student Debt

Even if you're not a math major, calculating and evaluating your student debt is crucial. You can use free tools such as these cost and debt calculators to figure out both college costs and how much student debt you owe.

Evaluate your college debt to figure out the best way to reduce it this summer.

In addition to tallying up current and projected debt totals, look for ways to alleviate the debt. For example, the IRS offers a wealth of tax information for students including tax credits, benefits, and deductions.

Student loan forgiveness is another option, although it often comes with stipulations such as working a mandatory number of years for a government agency. In addition, there are limits to how much of your loan debt can be annulled.

Balancing School, Work, and Life

Working off student debt in the summertime will increase your ability to earn money while safeguarding your study time during the academic year. Here are some suggestions for finding a good work-life balance:

Full-time work for faster loan repayment

While you may qualify for a work study job on campus, bear in mind that available work hours will be limited. Also, the pay for such positions is often not much higher than the minimum wage.

Working full time to reduce your college debt can hurt your academic performance.

A full-time job off campus has the best-earning potential. However, scheduling full-time work as a full-time student can be a logistical nightmare. It can also negatively impact your academic performance. For these reasons, it's easier to work full time in the summer, rather than during the school year.

Take the long-term view

Working full time over the summer may not seem like an attractive alternative. Still, it's better than facing a larger debt that could drag on for decades.

Find time for fun

To maintain a healthy social life while working full time this summer, plan to spend your spare time with family and friends. Focus on inexpensive activities such as hiking, camping, or just hanging out at home.

As you cut down college debt this summer, take time for inexpensive fun with friends.

Be realistic about how much money you can afford to use for entertainment and non-essential items during the summer. Set an allowance for discretionary spending on treats such as going to the movies and eating out, and stick to it strictly. The long-term goal is to pay off your student loans, not to create more debt by buying items you don't really need.

Reducing Student Debt While Increasing Opportunity

Even though you have to work to pay off student debt, think of it as an opportunity to get an early start on your career. Look in your chosen field for an entry-level position or paid internship. You can gain valuable, real-world experience in your prospective career field while working off student debt.

A paid summer internship can help you cut down college debt.

You may even be able to earn college credit through your work experience. This could reduce your overall student debt, since you may be able to substitute work experience for mandatory courses and require fewer courses to complete your degree.

If you're looking for other ways to cut down on student debt, check out Study.com's College Accelerator. You can conveniently and economically earn college credit wherever you are, at any other time of year.

By Michelle Baumgartner
June 2018
college college affordability

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