Break Free from Student Debt
If you’re among the millions of Americans struggling with student loans, you know that making minimum payments won’t get you debt-free anytime soon. Refinancing is one option, but it’s not the only way to cut down your debt. Here are some unconventional strategies to shave thousands off your student loans.
Forgiveness Programs: A Lifeline for Borrowers
The Public Service Loan Forgiveness Program can significantly reduce debt for borrowers working for qualifying government and not-for-profit employers after 10 years. Additionally, federal and state-specific loan forgiveness programs are available for healthcare professionals, lawyers, and teachers, among others. Mary Katsoulas, a 34-year-old teacher, had $17,500 of her student debt wiped out in 2011 thanks to the Teach NYC Loan Forgiveness Program.
Employer and Alma Mater Assistance
About 4% of employers offer student loan repayment assistance, according to student loan expert Mark Kantrowitz. But your company isn’t the only place to look for help. Some alma maters, like Yale Law School, offer income-based benefit programs for alumni. Tasha Cochran, a 35-year-old lawyer, receives a $10,000 check twice a year from her alma mater, covering her loan payments.
Location, Location, Location
Some cities and states are willing to pay back some of your loans if you move there. Kansas, for example, offers student loan repayments up to $15,000 (plus state income tax waivers) for qualifying full-time residents in one of 77 rural counties. Similarly, moving to downtown Detroit could shave $20,000 off a home purchase, freeing up cash to put toward your loans.
Cash-Back Cards: A Loophole to Savings
While most servicers won’t let you make payments with credit cards, Steve Burt, a 26-year-old financial analyst, found a workaround. He uses rewards cards to purchase prepaid debit cards, which he uses to pay down his loans. This year alone, he’s made $6,000 in extra payments and received roughly $1,500 in cash back, funneling it straight back to his loans. Over the life of his loan, he estimates he’ll save about $14,000. The key is paying your credit card bill in full every month to avoid negating any savings.
By exploring these unconventional strategies, you can take control of your student debt and start building a brighter financial future.
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