Are you struggling to pay off your student loans?
While you may be happy with your degrees and your memories from university, you aren’t happy with the incredible amount of student debt that you carry around day-in and day-out. Find out what you can do to resolve it, depending on how much you’re struggling with repayments.
The Student Debt Crisis
The price of post-secondary education in this country is extremely high. Without a hefty scholarship, the average person can’t afford to pay their university/college tuition out of pocket. And skipping school entirely could make job opportunities dry up. Often the only solution seems to be to apply for student loans and then worry about the repayments after graduation. Education is the main reason why millennials are in debt — it’s not mortgages or business loans, it’s tuition.
If you’re completely overwhelmed by your loans, and you don’t think you can pay them off, there are solutions out there:
- Repayment Assistance Programs
- Consumer Proposals
- Personal Bankruptcy
The government’s Repayment Assistance Program is designed to help people who are struggling. Through the program, you could have your monthly amount reduced or your total payments decreased. Talk to your federal/provincial Financial Aid Office at the first sign of trouble.
If that’s not enough, the next step would be to seek out a licensed insolvency trustee to either file for a consumer proposal or personal bankruptcy. The firm David Sklar & Associates offers bankruptcy assistance across Ontario and offers services like consumer proposals and credit counselling. With social distancing in effect, they are providing consultations and services online and over the phone.
The one thing that you should know about consumer proposals and personal bankruptcy is that they follow the 7-year rule when it comes to government student loans. These options will only discharge your student loan debt if you file 7 years after graduation or officially dropping out.
Paying It Off on Your Own:
If you can’t turn to these serious solutions just yet, you can try to pay down that mountain of student debt on your own. Read these tips to help you reach that ambitious goal:
Adjust Your Budget
Treat your student loans like essential costs in your monthly budget. If there’s not enough room in your budget, see whether you can shrink some of your variable expenses like entertainment, transportation and food.
Take Advantage of Tax Breaks
Tax season may have passed, but this student tax break could come in handy for next year. As a recent graduate, you can claim the interest on your loan as a non-refundable tax credit.
Save Up during the Moratorium
Certain things have been put on hold because of COVID-19. For instance, the federal and provincial government put a moratorium on student loan payments and interest fees until September of this year. Take advantage of this short break and save up as much as you can. A few months’ worth of savings could help you catch up on your repayment.
The last piece of advice that you should follow is that commitment is key. The average person takes about ten years to get rid of their student debt. You’re not going to get rid of it all in a few months. This is a marathon, not a race.