Student Loan Debt: Paying Off College Tuition

Struggling to pay off your student loan at an entry level salary? You don' t have to be in debt your whole life. Below is a list of options for paying off your student loan.

• Consolidate Your Student Loan

• A consolidation loan pays off multiple loans with one new loan.
• If the combined balance of your student loans is greater than $7,500, you can extend your repayment period beyond the standard 10-year maximum. If your combined balance is as high as $60,000, you can extend repayment to 30 years.
• Once you consolidate all of your student loans, you cannot consolidate again unless you have loans that were not included in the original consolidation.
• Consolidating your student loans into one can reduce your monthly payment by 50%. If you are currently paying $750 a month and consolidate, you may only have to pay $400 a month, depending on the loan's interest rate.
• Consolidating your student loan can improve your credit score.

• Apply for Volunteer Work

• Americorps. The domestic sector of the Peace Corps offers up to $7400 in living stipends and about $4725 in education awards after completing one year of service. This award can be used for college tuition or student loans. The stipend gives you roughly $616 a month to cover housing and other living costs.
• Peace Corps. This organization assists people in developing countries to provide them with a better life. Volunteers who have outstanding Perkins Loans can receive a 15% cancellation on the debt owed for each year of their first two-year service term and a 20% loan cancellation for their third and fourth years of service. You can receive up to a 70% cancellation on your Perkins loans.
• Military. Service in the military may qualify you for financial assistance for college tuition. Students who serve in the Army National Guard may be eligible to receive up to $10,000 through their Student Loan Repayment Program.

• Payment Options

• Standard Payment - fixed monthly installments. Go for this option if you have a job lined up and can afford your monthly payment.
• Graduated Payment - The payments are kept low initially. After you get a job and the initial period is over, you start paying off your loan in normal installments.
• Variable Payment - The amount of installments is adjusted according to the fluctuations in your income and expenses. This option is attractive if you have a new job or business that does not have a fixed monthly income.
• Extended Payment - It is not advisable to extend payments too long as you will owe more money as the interest on your loan increases. That being said, if your loans were taken out after October 1998 and you have a balance greater than $30,000, you may qualify for an extended repayment term of 25 years. This option may allow you to lower your monthly payments.