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View Full Version : How can a college student eliminate her loans ?



CreoleSun
01-12-2005, 10:48 PM
I dont know if this topic has started on here before, but if not I hope someone here who is financial savvy to help me out.
Basically i'm close to graduation and i'm planning on going to graduate school one day but not immediately after undergrad, but lately i've been thinking about my loans that i have accrued over the years and i just wanted to know if there is other financial resources besides putting my "left over financial aid money" into a savings account to pay off my loan.
I was thinking something between the lines of putting it into a account that will add interest to it and that i wont be able to touch it after x amount of years....does any body have a clue as to what i'm saying or know something that will help.
'cuz everytime i get my financial aid money i feel bad that i wasted it on stupid things that i'm gonna end up throwing away when in fact i should use it to eliminate long term things such as loans and credit cards.
I need help :(

Sekhmet
01-14-2005, 01:50 PM
Originally posted by CreoleSun@Jan 12 2005, 03:48 PM
Basically i'm close to graduation and i'm planning on going to graduate school one day but not immediately after undergrad, but lately i've been thinking about my loans that i have accrued over the years and i just wanted to know if there is other financial resources besides putting my "left over financial aid money" into a savings account to pay off my loan.

If you have left over financial aid money, you shouldn't even bother putting it into a savings account to pay off the loans. The interest being earned in the savings account (2% or so) is probably less than half of what the loan is accruing (5-8%). Most lenders do NOT have early repayment penalties. You can simply send that money in on your loans if you are so concerned about getting down those amounts ASAP. You will save more money in interest paying early on the loan than you would make in interest with the savings account.

Your absolute BEST bet is to take that money and pay off consumer debt -- credit cards.

outstanding
01-15-2005, 03:04 AM
How are you going to pay for grad school? There is a program called Upromise. www.upromise.com. Depending on who you have your loans with they give you money for buying certain things, or eating certains places, where you grocery shop and all types of other stuff. It is not alot but every little bit helps. Have you checked into loan consolidation? When you do go back to school you know you can get your loans deferred. But if not, and you don't have a job, you can get a forberrance.

ooooo
01-27-2005, 06:23 PM
It's funny you mentioned this topic. I'm in this predicament myself. I owe upwards of $20,000 on education loans for my bachelor's degree in American Ethnic Studies. I have been wondering how to pay off my debts early and have made up a few plans.

Number one, pay off your credit card debts with that extra money because credit card interest is USUALLY higher. I actually have a credit card with 4.9% interest rate but that's unusual.

Then pay off your next highest interest loans. Maybe your car loan? I am blessed with a 2.9% interest rate on my 2004 Honda Civic but not everyone is so fortunate.

Then work on your school loans. I think the best thing is to focus LIMITING these school loans while you are in school. Go ahead and REJECT any loans that are over your necessities. That extra financial aid indicates that you are accepting too much in loans. You can REJECT whatever your AVERAGE EXTRA FINANCIAL AID tends to be in order to reduce your school loans.

Once you are out of school the most obvious option is to work a job that allows you to have the extra money to apply toward your school loan payments OR put it into a short term investment option such as a CD, mutual fund, or money market fund. If your job doesn't pay much, you can save money by living with a roommate, your parent(s), or other family. Even if you do get paid well once out of school, living with someone else and not having any(more) kids will increase the amount of $ you can use to pay off your loans.

Remember money isn't everything. Money vs Humanity is a conflict that has been resolved by the blood of Christ. He saved us from the need to obsess and worry over the flesh and practicalities. Have faith in Him and be blessed.