Paying off student loan debt as soon as possible - KFVS12 News & Weather Cape Girardeau, Carbondale, Poplar Bluff

Paying off student loan debt as soon as possible


Student loan debt is a reality for a lot of college students; and for many new graduates, they are thinking about how they are going to pay it back.

There is a staggering amount of debt facing graduates right here in the Heartland.

When you look at the total debt for graduates at Southeast Missouri State University, 95-percent of that comes from Federal Student Loans. That's according to the latest numbers from

Paying that back can overwhelming for anyone, but there are some awesome resources to make those debt payments a little bit more manageable.

Recently, thousands of Southeast Missouri State University and Southern Illinois University grads proudly walked the stage to get their diploma. However, many are also walking into thousands of dollars of student loan debt.

Derieck Hodges specializes in managing finances.

"Statistic are people are leaving college with an average of somewhere in the neighborhood of $25,000 in debt," he said.

For Southeast grads, it's not that far off. They average just over $25,000 in student loan debt.

For Southern Illinois University Carbondale, we're talking more than $30,000.

It's like taking on a car payment, said Hodges.

"A car you typically pay off in what four, five or six years. Student loans they could be 10 years. They could be 20 years," he said.

So it's important to have a plan. Ask yourself, "Hey, I owe this obligation, how do I make it work?"

For some, when they do the numbers they're going to end up in the red. They may not have enough income, Hodges added.

Some new options might take away some of the sting, like income-based repayment. Where they go in and adjust your monthly payment lower based on your ability to pay; and monthly payments will never be any more than 15 percent of your discretionary income and provides loan forgiveness after 25 years.

If that's not for you, the "pay as you earn" plan can also help lower your monthly payment.

"Your payment will be adjusted accordingly as your ability to pay goes up and so then you can start paying that debt back faster."

This route offers forgiveness after 20 years of payments, rather than 25.

Both put you on a fairly long journey, which is still a lot of interest to be paying, and for folks who take student loans into their 30s and 40s, Hodges said he thinks they ultimately would tell you they had less choice, because the last thing you want to do is default.

"If you get in a situation where you don't manage your debt, including your student loan debt, it's going to be an issue. It's going to show up on your credit report," he said.

Which is tied to everything these days. From renting or buying a home to even future employment.

"The path in, into trouble, is quick. Path out is long," he said.

Hodges said paying back student loans fast is the pathway out, even if that involves taking a second job.

Download the KFVS News app: iPhone | Android

Copyright 2015 KFVS. All rights reserved.

Powered by Frankly