Angel is a freelance writer who loves to share the ins and outs of her daily life. To include the massive fails and amazing wins.
I currently am the owner of $91,436 and some cents of student loan debt. While I was going to school, I chose one of my lender's repayment programs, which if had it been explained to me properly, I wouldn't have done. At the time I was paying $50 a month while in school. And boy, each year I got hit with insane interest: $17,000 one year and a little over $19,000 the next. Then I chose to defer, again, I didn't know any better and I wish I had. I got hammered with accumulated interest the next year. So $32,000 ballooned to almost $100,000 in a matter of four years.
Then life hit. I was jobless and unable to find a job, and my husband was the only one working. We had a mortgage payment, car payments and other miscellaneous bills, and including some major emergencies that hit during that period, well ... I defaulted.
When I defaulted on my loans—yes, loans, I have four, two private and two federal—I was receiving upwards of 20 phone calls a day from my lenders. They threatened everything from wage garnishment on my husband (he's my cosigner), to court, to loss of assets; one even threatened to have my children removed.
Bankruptcy wasn't an option for me, as it would leave my husband on the hook for all of my loans. So I got my butt in gear and started working with what I had. I called my lenders and got on a reduced interest rate program and did it for two years, dropping my loan balance almost $15,000 during that period. I unfortunately didn't qualify for an additional six months, and my student loan payment is $1,001 a month. We are on only one paycheck still, but we don't eat out, we grocery shop in bulk, we buy the small things elsewhere, and we gave up tobacco products. Saving approximately $637 a month, which is added to the loan, I also do side jobs until I can get a work-from-home stable job, adding another $400 that either goes towards my loan or towards bills, so any extra can go towards my loan. To include every year at tax time, if there are no bills to pay off, all but $1,000 goes towards my insane loan. Due to this, I'm set to pay off all $91,000 in 2025, 22 years before the life of my loan.
Student Loan Debt: The Reality
With the rise of for-profit colleges and the lack of college funding via scholarships and grants, student loan debt has almost tripled since the time of our grandparents. As of April 2020, the United States student loan debt is 1.6 trillion dollars, with the average student/household having $38,000 of that 1.6 trillion. With the most expensive states, California, New York and Florida holding about 20% of the student loan debt. Of that 1.6 trillion dollar debt, approximately 11% of borrowers are 90 days or more late on their payment or defaulted on their loan.
The Job Market
Jobs are becoming harder and harder to find. That doesn't mean there aren't any, it just means as more and more people are fighting for the same position as you, jobs are more difficult to obtain. Whether someone is more qualified than you, you're overqualified, or your resume isn't as strong as the others applying, decent-paying jobs are incredibly difficult to not just find, but obtain. Especially if you don't have a degree or experience in the specific field the recruiter is looking for.
So Where Do You Begin?
The first place to start is analyzing your bank account. Go through at a minimum 6 months of statements in some type of entry format, whether that be Excel, Quicken, etc., and take a hard look at your spending habits. How much money did you spend on takeout over that 6 month period? How much did you spend on an outing with friends or family? How much did the recent movie theater trip cost you? How much do you spend on fuel? Tobacco products if you use them? Groceries? That new iPhone?
Once you have all the math done and analyzed, see where you can actually cut your expenditures. For example, instead of eating out 3 times a week, cook all your meals, and prepare enough for the next day's meals if you're able. All that money you originally spent eating out can be applied to your student loan payment.
Do Everything With Purpose
Now that you have a solid foundation and understanding of your finances, you need to do everything after that with a purpose; the purpose of saving as much money as possible each month to add additionally to your loan. You don't have to live frugally, but you do need to be incredibly conscious of your spending habits.
According to Bankrate's student loan calculator, adding an additional payment of $200 a month to a $91,000 student loan at a 12.75% interest rate over 30 years will remove 13 years off your total time to pay, saving you over $120,000 in interest over the life of the loan as well.
Refinance Your Student Loans
Sometimes refinancing can help keep afloat or ahead by offering a lower interest rate or potential lower payment, getting you ahead of that tremendous student loan debt, but there are some things to keep in mind when choosing to refinance.
The first is, if you do not have a degree, there are currently only a few lenders who will even accept your application. We'll start with Citizens One, but they will only refinance up to $90,000 max with a minimum needed of $10,000. You will need to have an average credit score of 640 or have a cosigner available with a credit score of 640 or higher.
Wells Fargo is another lender that does not require a degree, and their max loan amount is $250,000 with a minimum $5,000 needed to consolidate. Keep in mind, you have to have a minimum of $1,000 left on each loan balance in order to apply. With Wells Fargo you will still need either a co-signer or an average credit score of 640–660 or higher.
Those are the only two lenders, from my extensive research and attempt to refinance myself, that will allow me to even consider refinancing without a degree.
Have a degree? Well there's tons of lenders available for you, from Discover to PNC. However, each lender will require one major thing. The school you graduated from has to have offered federal student aid, has to be what is known as a Title IV school, in order for you to refinance. If your school didn't fall into that category, you unfortunately cannot refinance. Also, some lenders require that you are currently either a student or working in your graduated field. Make sure that should you choose refinancing, you meet the income requirements as well as the required credit score before you apply.
Refinancing Isn't An Option: Other Ways To Save
Most, not all, student loan lenders offer different levels of repayment programs, ranging from "income dependent" to "financial hardship." But these are not easy programs to get into.
Let's talk about income-based repayment plans, also known as IBRs. These are programs where you pay a certain amount each month based on your current income. These programs range from 10% of your discretionary income to as much as 15% over a certain amount of time.
However, these income-based plans only apply to federal student loans. Unfortunately, private student loans do not offer any type of income-contingent programs.
Private loans do offer a forbearance, but I would not under any circumstance recommend you accept one. This is because while you are on forbearance, all that interest just keeps compounding, leaving you owing more on your loan than you originally did.
Private loans also offer financial hardship programs. These hardship programs allow you to have your interest rate and payment dropped for the next six months while you get everything in order. But this is only a temporary solution, as you have to reapply every 6 months, and should your finances change even slightly, you risk the program not being renewed.
All Is Not Lost: Working From Home
Working from home allows you to not only work in your degree field, but it also allows you to save money on fuel, other commuting costs, and food. You'll still need a resume for most sites, but there are a lot of jobs available for anyone in any circumstance and any background.
Flexjobs.com is an incredibly comprehensive website that hosts jobs from top 500 employers to your basic run of the mill call center. Each job is vetted by Flexjobs, so the scams are virtually non-existent. Flexjobs isn't free, the cost is $14.95 a month for access to thousands of jobs posted by employers.
Indeed is also a comprehensive job opportunity website. However, they do not vet their employers and not all employers are the same. There are a lot of scam jobs on Indeed, so be cautious when applying from Indeed.
HitmarkerJobs is a job website suited towards those in design fields or those with esports experience. The jobs posted there range from developers needed for huge companies like Blizzard and Riot Games, to journalists for Dexerto, to game coaches for AAA titles. There are also freelance and unpaid jobs to help get your foot in the door if needed.
Are your finances okay, but you could use a little extra cash to add towards those student loans? There are a few ways you can do that, all while earning experience related to transcription and captioning fields. And after some time, you may have the experience to be able to apply for better transcription or captioning jobs.
Crowdsurf is a crowd-sourced platform that handles everything from transcription to captioning for clients. In order to start working and doing tasks for Crowdsurf you will need to take two tests. The first is a grammar and basic English comprehension test, the second a transcription test using their guidelines. If you pass, you will receive your login credentials via email in a few days to a few weeks. If you haven't received your credentials after a few weeks, send them an email. Pay for tasks varies from $.05 to a few dollars, making this a solid way to throw some extra money on your loans. There are often times where there is no work, so ensure you have a backup.
Rev does both transcription and captioning services. You have to test for both areas separately. They have a really bad habit of "firing" you without any advance warning and their guidelines are in-depth, confusing, and somewhat overwhelming. But the pay is about $.17 per audio minute, and if you're efficient as both a typist and captioner, you can make around or a little above minimum wage.
This Is Doable. You Can Do This!
How do you find ways to pay off your student loan debt faster? Let me know in the comments.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2011 Angel Whisenant