For more than 40 million Americans saddled with student loan debt, some new programs may bring some relief. Across the United States, student loan debt totals nearly 1 trillion dollars which is more than credit card or auto loan debt. News 3’s Naomi Keitt spoke with financial aid officials at Columbus State University to bring us the best ways to pay off your student loans.
Michael Grafton is a junior at Columbus State University studying English. To pay for tuition and other expenses during his college years, he’s already taken out nearly $40,000 in loans.
“I’ve been thinking about paying them back, but I definitely can’t do it until I graduate and land a new job. I plan on going to law school and that’s going to be more loans on top of loans,” said Grafton.
Grafton hasn’t researched repayment plans just yet. He says he will focus on that once he gets his degree.
“Are you nervous about having to pay all that back,” asked News 3’s Naomi Keitt. “Yes, because it’s a substantial amount. Most people when they graduate from their Bachelors its $35,000 or $40,000. I’m already at that now and I haven’t even graduated,” said Grafton.
Grafton is one of nearly 40 million Americans saddled with student debt. The director of financial aid at Columbus State says there are a number of repayment plans that can help you pay off your debt.
“The new one is pay as you earn where you can pay 10% of your income but not more than the standard payment amount that runs 10 years,” said Russ Romandini.
For the “Pay as you Earn” plan, the monthly payment is based on your income and family size. Romandini says it’s vital that you work with your financial aid department during school and your loan provider after college to manage your debt.
“They can really be successful in repayment and really understand when they borrow. That’s the real key,” said Romandini.
Before even taking out loans, Romandini encourages students to weigh all your options like scholarships and grants.
“It can really make a big difference in the long run, especially as they get out and start working and start to repay. It can be really good,” said Romandini.
The “Pay as you Earn” program is not available to student with older loans. You have to have borrowed after October 1, 2007. The new program should be available starting December of 2015.
For more information on student loan repayment you can visit https://studentaid.ed.gov/repay-loans.