Getting Out of Student Debt

Advice on repaying student loansFor many, student loans have been the only way they could afford to get their college education, and at the time of the decision those loans seemed like a reasonable and viable option to attain their education.

Unfortunately, economic down-turn and sky-rocketing unemployment have now made those student loans difficult if not impossible to repay.

So, now that you have both this new found knowledge and these exorbitant outstanding loans how do you get out of debt? Below are some things to consider as you attempt to pay off your student loans.

Sit down with your stack of bills, pen and paper and evaluate what you have going out, as well as what you have coming in.

This doesn’t mean simply write down your monthly bills and payments, also write down the following:

  • Interest Rates
  • Due Dates
  • Account Balances
  • Types of Loans – Meaning is it a fixed monthly amount, variable, charge account, etc.

Make sure to list all of your expenses including utilities and annual expenses such as licenses, taxes, and insurance.

Once you have all this information compiled compare interest rates and due dates. This will give you an idea of what will take the longest to pay off and how you can split up your paychecks.

Living expenses have to come first, look at cutting back where you can. Figure out what is left over after living expenses are paid to pay the rest. Consider arranging payment plans on non-interest accruing expenses like utilities to free up funds towards interest accruing bills. Some utility companies will do what’s called “averaged monthly billing”.

When large amounts like tax returns come in, put them towards the interest accruing account that is closest to being paid off; once that bill is paid off, that monthly payment can go towards other interest accruing accounts.

When there simply isn’t enough to cover all of the additional expenses, a rising number of people seem to be considering bankruptcy. It’s true that by declaring bankruptcy on high interest, non-school loans, you free up money to pay off your student loans. However, student loans don’t qualify for bankruptcy, so this option is only possible if you have credit card or unsecured loans.

And remember that declaring bankruptcy is a very serious step that will follow you for many years to come: it is most definitely not a decision to be taken lightly. If you are genuinely considering taking this drastic step, you should first seek advice from a qualified financial professional.

For more in-depth help on repaying your student loan, you can find some very useful information here.



  1. Article is interesting, but I wonder where I can find good company for pre settlement funding, any ideas?

  2. With student loans or everyday living you MUST prioritize or you will certainly struggle. But I think it’s more relevant for younger adults since they may not have been faced with situations where you must choose from two wants or even needs.

  3. Having a trusted financial adviser would be money well spent in a situation like this. Student loans can be daunting, but tackling them as they come due is the best way to stay on top.

  4. Hmm, I didn’t know that utility bills didn’t accrue interest. Is this all the time, or should I be shopping for specific companies? I’m usually pretty punctual with my electricity and cable and the like, but maybe I’ve got my priorities wrong, because my student loans are getting out of control.

  5. Ugh, paying back loans it the worst! I would say that prioritizing is the first and most important thing you need to do when paying back your student loans because if you don’t manage to cut back on some expenses, you’re doomed.. 🙁

    • It’s true. I think that part of the problem goes back to the fact that schools do not give their students enough education on personal finance. It’s such an important subject and a lack of understanding in it leads to what we are seeing today: students with massive debt that they are really struggling to deal with.

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