4 Strategies To Use When You’re Broke And Can’t Pay Your Student Loans

4 Strategies To Use When You're Broke And Can't Pay Your Student Loans

You’ve recently graduated from college and you have over $60,000 in student loans to pay back.

Over the past year, you’ve job-hunted like crazy, but you haven’t even been able to find work in your field.

Eventually you settled for a job which pays you around $20,000 a year—but you’ve already spent more than a year unemployed.

You’re broke, and it doesn’t look like that is going to change anytime soon. What do you do?

If you find yourself in a situation like this, you are hardly on your own. The average student loan debt has increased year over year for more than a decade.

The average 2015 graduate owes back more than $35,000. The total student loan debt in the US is more than $1.2 trillion.

How can you pay back your student loans and get back to living your life? It certainly won’t happen overnight, but here are a few suggestions.

1. First, start keeping a budget.

First, start keeping a budget

It is seriously amazing how many people do not do this. For that reason, it bears some emphasis.

Tally up your receipts every month and figure out where every penny is going. Compare that against how much money is incoming and figure out where you stand.

2. Look for creative ways to cut costs.

Look for creative ways to cut costs

Even if you are already living economically, there may be ways you can be even more thrifty.

Consider downsizing your home or renting out a room to make up for some of your mortgage or rent costs. Apply for food stamps if you think you may qualify.

Cook for a week whenever you can (soups, stews, and casseroles are great for saving money). Negotiate to a lower payment rate on your phone bill if you can.

Ditch your cable subscription. Trade in your expensive car for a cheaper one.

Look for a better deal on your insurance (bundling insurance for your home and car is a great way to lower costs).

3. See if you qualify for loan forgiveness, forbearance, or deferment.

See if you qualify for loan forgiveness, forbearance, or deferment

Deferment is better since interest will not accrue.

You may also qualify for an income-driven repayment plan. This puts a cap on your monthly payments so you are never parting with more than 10-20% of your discretionary income.

In some cases that may mean that you temporarily are relieved of the burden of paying on your loans altogether.

4. Refinance your student loans.

Refinance your student loans

While some lucky graduates may qualify for a government program to forgive or defer a loan, most will not.

One thing you can do however is apply for a program to refinance your loan at a lower interest rate.  This could save you thousands of dollars over time.  You can refinance your student loan with SoFi.

It can be daunting to wonder how you will ever pay back your student loans while you are struggling just to survive.

But there are options, and if you do your research and make some clever adjustments to your life, you may be able to start getting back on track!

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