How to Deal With Your Student Debt Head On

February 25, 2019

The student loan is the second highest debt category after the mortgage, in the United States. It’s even higher than auto loans or credit cards. The average student of the Class of 2016 has roughly $37,172 in student loan debt. And if you think that you’re alone in this, don’t. There are over 44.2 million people in your situation that collectively owe over $1.5 trillion, as of 2018. To make matters even worse, the student loan delinquency rate (90+ days) is at 10.7%.

Student loans have helped many receive a college education who would, otherwise, not have been able to. Nevertheless, student debt is frequently a barrier for homeownership, and with rising debt, more and more people are beginning to fall behind on their payments. 

So, how can you deal with your student debt faster? 

Basic Budgeting

To successfully tackle student debt, you will first require a positive monthly income. It will help you pay more at once, and thus, eliminate it more quickly. There’s no necessity for any fancy footwork here, just some basic budgeting. 

There are several ways to increase your monthly income, the easiest of which being to cut down on unnecessary expenses. Keep in mind that every dollar counts here. Gym memberships, cable, and other entertainment sources can be reduced. You can also opt to eat at home more by preparing the food yourself. Likewise, it could be a good idea to invest in some energy efficient light bulbs and appliances. Even though this is a so-called tightening of the belt, regard it as an opportunity for improving one’s self-reliance.   

Federal and Private Student Loans

When tackling student debt, it’s crucial that you know what type of loan you have. These can be either federal, private, or a combination of both. This information will help you in better understanding your repayment options. 

Federal loans, for instance, are all based on a standard ten-year plan. Nevertheless, these loans have other types of repayment options that are based on your income or extend over more than the usual ten years.

Private loans, on the other hand, have fewer repayment options. If you have a good credit score and stable income, you could refinance to get a more affordable payment. Those that don’t, however, a chapter 13 bankruptcy may be a wise way of protecting the co-signer and get more time to repay the loan. 

Consolidation or Refinancing? 

If you have several student loans, you can consider consolidating them in one payment. But depending on the type of loan, a consolidation may take away some benefits such as loan forgiveness or subsidized interest. 

Refinancing your student loan is another option that can help you save on interest. It is a better option when dealing with private loans but not federal ones. Refinancing federal loans will forfeit all protections and options that come attached. That said, private loans can be refinanced but only when you have significant income and credit. 


Naturally, the way you tackle student debt is entirely dependent on the type of loans you have, as well as how your income and credit are doing. Now, regardless of the circumstances, you will have to put a comprehensive plan together and stick to it. 

One way of going about things is to start with the lowest balance and pay it off as soon as possible. A second option is to go the other way around and start at the top, the loan with the highest interest rate, and move down from there. Whatever strategy you choose, commitment is critical. And even though it may be tempting, we strongly advise you to stay away from payday loans, or any other type of short-term bad credit loans. At Illinois Lending Corp, we don’t hold a long list of fees or pre-payment penalties! You can sign up here in one click, but be sure to check us out before you do. Never, ever, take out a loan without doing your proper research first! 

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