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11 Superb Student Loan Debt Hacks

11 Superb Student Loan Debt Hacks

Blink.

Did that take the better part of a second? There, student loan debt just grew by $2,726. According to Marketwatch, that around three-thousand dollar number, accumulating every second, is part of about $1.3 trillion dollars graduates now owe for their college educations.

The debt can be a lifelong leech. What would life be like without it? This is the question millions of people are asking. We pursue a career because we’re passionate about something. But plenty of us also pursue a career, and get a degree, because we want to make good money. Paradoxically, this pursuit of good money means we owe more than ever before.

Don’t despair. This is a chance to tackle a very real problem, a problem shared by 40 million Americans and counting. You’re not alone here. Plenty of us feel this is out of control. Think of taking control as a continuing education process. You’ve got to own the debt, corral it, and work with it until it’s out of your life.

1. Organize daily finances

It will be easier to sort this out if all of your daily finances are in order. Here are the steps:

Organize by using free services – Mint and Personal Capital are both tools for putting all of your accounts, including bank accounts, investment accounts, and student loan accounts, onto a single dashboard where you can see them

Do autopay – Your budget should be setup so your loan repayment is part of basic expenses that don’t change; tell your bank to autopay basic expenses online each month and make sure you deposit enough from each check to cover the autopayment. Setup overdraft protection in case something goes wrong, set up auto-debit directly with your lender, and receive a twenty-five cent discount on your interest payment

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Audit yourself – At tax time each year, check your accounts thoroughly to make sure nothing is amiss

2. Look into loan forgiveness

You may be eligible for loan forgiveness. Here are the types:

Public Service Loan Forgiveness – To qualify for PSLF, you must work for a non-profit, the government, or “a private company that provides public services”; also, your loan has to be from the federal Direct Loan Program, and you have to have already made 120 payments; check out the hack on income-based payment plans for info on how you can pay nothing per month but have it qualify as payment

State forgiveness – 45 states offer forgiveness; the majority of these programs also require you to have a job in public service. Go here to find information state-by-state

Perkins Loan cancellation – This also applies to public service individuals who received a Perkins Loan; in particular, teachers who work in any of the teacher shortage areas, or at low-income schools, qualify. For the full list on who’s eligible and the amount that could be forgiven, go here.

Military Forgiveness – Military personnel qualify for the PSLF, the Perkins cancellation, the National Defense Student Loan Discharge, and the Veteran’s Total and Permanent Disability (TPD) Discharge, as well as a number of deferments and repayment programs

3. Check out a DIY payment guide

This guide offers advice on the following:

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Why making larger payments makes sense – simply paying $200 more than the minimum payment per month saves you $2,400 on interest, and you pay off the loan 4 years earlier

The value of the right mindset – listing the reasons why you want to live frugally, in order to pay off your debt quickly, will help prepare you for the challenge of tightening the belt

How to create a spending plan – looking at your last three months of bank statements will help give you an idea of your average expenses

How to track spending – you can create a spreadsheet with each expenditure listed, and phone- reminders of when to make payments

Creating an emergency fund – start with $1000 and then try to save 3 to 6 months’ worth of expenses

Taking on an extra gig – the gig economy offers a ton of options, such as driving for Uber, and according to Fabio Rosati of Upwork, this economy contributes “more than $700 billion to our national economy”. Why not take advantage of the options?

Creating your repayment plan – The National Student Loan Data System will pull up all your loan services, and from there you can decide on a “Snowball Method” or an “Avalanche Method” of repayment

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Looking at alternative repayment plans – Loan consolidation, deferment, and forbearance are all options available to you

Getting a support system – having someone there to keep you accountable is priceless

Rewarding yourself – finding small ways to do this will help keep you on the payment path; after all, man cannot live on bread alone

4. Look into income-based plans

In December of 2015 the federal Revised Pay As You Earn (REPAYE) program will go into effect. This program is more lenient than any of the income-based programs that have been available. Under this program, if you received a Direct Loan, you’ll pay no more than 10% of your discretionary income. “Discretionary” income is Adjusted Gross Income above 150% of the poverty level for your household.

If you absolutely have no job and no income, you’ll still qualify for this plan—unless you’ve defaulted on your loan. You could end up paying nothing per month if 10% of your income is nothing. But interest would still accrue.

You can also consolidate your Federal Family Education Loan (FFEL) and Perkins Loan into a Direct Consolidated Loan, which would then be eligible for REPAYE.

5. Look into consolidation  

A caveat: you can’t consolidate private and public loans. Consolidating your state and federal loans will allow you to pay less per month, but once again there’s the issue of interest adding up as you’re making minimum payments. Still, consolidation will simplify the situation, giving you one payment at a set interest rate. And thanks to REPAYE, that payment could be very low, which will help a great deal if you’re strapped for cash right now.

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6. Deduct your interest  

Look at the information your lender has sent you. Anything helps, and you can reduce your taxable income by up to $2,500 if you’ve been paying on the interest for your loans. If you qualify for deferment or forbearance (meaning you wouldn’t have to pay on the principal of your loan for a certain period of time), try scraping together money to pay on the interest, and then look into deducting what you pay from your taxes.

7. Volunteer for Zerobound

Here, you can sign up to volunteer and get crowdsourced money to go towards paying your student loans. SponsorChange is another site of this same nature. Make sure to familiarize yourself completely with these opportunities before you take them.

8. Volunteer elsewhere

AmeriCorps, VISTA (Volunteers In Service To America), Peace Corps, Teach for America, and National Health Service Corps offer forms of student loan forgiveness or reimbursements.

9. Try a student-friendly cash-back credit card

Be careful with a credit card; it’s the same as taking on more loans. But if you are confident in your budgeting skills, a card such as UPromise is specifically designed to give you good cash-back rewards from your purchases, which can then go directly toward paying off your debt. You’re going to be making purchases anyhow, and this is a chance to make money from them. But you have to be highly disciplined.

10. Consider refinancing

Right now this will lower your interest rate. But once again, be careful. Refinancing will put you in private loan territory, where none of the options (listed above) for a federal or state loan apply. Don’t refinance unless you’ve got a good job, are sure you can meet the principal on your loan, and are simply looking to pay less interest. But be aware that interest rate could go up.

11. Be aware of the discounts

There are direct-debit discounts, on-time payment discounts, graduation credits, and a degree of forgiveness available from certain lenders. The Department of Education also offers two types of discounts.  

Featured photo credit: Light brigading via flickr.com

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Daniel Matthews, CPRP

A Certified Psychosocial Rehabilitation Practitioner with an extensive background working with clients on community-based rehabilitation.

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Published on November 8, 2018

How to Answer the Tough Question: What are Your Salary Requirements?

How to Answer the Tough Question: What are Your Salary Requirements?

After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

Unfortunately, this is the wrong approach.

Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

Of course, you can’t command a high price without bringing value.

The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

1. Hack time to accomplish more than most

Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

2. Set your own boundaries

Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

Here are some important traits to consider:

  • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
  • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
  • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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3. Continuously invest in yourself

Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

4. Document the value you bring

Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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Here are some ideas:

  • joesmith.com
  • joeasmith.com
  • joesmithprojects.com

Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

5. Hide your salary requirements

Avoid giving you salary requirements early in the interview process.

But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

6. Do just enough research

Research average salary compensation in your industry, then wing it.

Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

7. Get compensated by your value

Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

The bottom line

You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

Featured photo credit: LinkedIn Sales Navigator via unsplash.com

Reference

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