5 Tips For Paying Off Your Student Loans in 4 Years or Less

Follow their advice and you should be able to become debt-free, too

Apr 20, 2014 at 2:30PM

Source: Flickr / Md saad andalib.

No one wants to begin their adult working life saddled with college loan debt – yet that is precisely the situation in which many graduates find themselves these days. If the thought of paying back four years' worth of loans over the next two decades makes your head spin, take heart. Others have been in your situation, and have managed to rid themselves of onerous student debt in only a few years.

Here is some of the best advice culled from a handful of stories from college graduates who were able to take control of a daunting financial situation and emerge victorious – and debt-free – in an amazingly short span of time.

Tip No. 1: Know your enemy
Apparently, it's astoundingly easy to graduate from college and have only the most rudimentary knowledge about your student loans. The first step in tackling this problem is to learn the exact nature of your debt. One young woman who repaid $90,000 in loans noted that her first step in the process was going to the National Student Loan Data System and assessing her loan profile. All the success stories began by knowing intimately the terms of their student loan portfolio.

Tip No. 2: Decide to pay off the debt early – no matter what
Making the decision to pay down student debt aggressively was pivotal, an active decision made by all who succeeded in becoming debt-free. To get to that point, one described moving back with her parents, while another shared stories of biking to work to save bus fare. The tenacity required to stick with the plan through thick and thin was a common thread in these stories.

Tip No. 3: Prioritize your debt
Once these people knew their debt situation, they were able to see that they had several loans, not just one, and that some had higher interest rates than others. Each set up a plan to pay off these loans, starting with the one with the highest rate of interest. Most also had credit card debt, which was also prioritized and paid off.

Tip No. 4: Set up a budget, and stick to it
This part is of paramount importance, and goes hand-in-hand with Tip No. 2. Having the will to dedicate themselves to becoming debt-free led to taking a good, hard look at their personal finances, which almost all admitted were a mess. One young woman learned about budgeting from a personal finance workshop, and ruthlessly squeezed extras out of her monthly expenses. She paid off a combined student loan and credit card debt of nearly $25,000 in less than four years.

Tip No. 5: Keep track of your loan profile, and contact the servicer promptly if problems arise
Don't expect your loan servicer or lender to get everything right – check your paperwork often, and call if you see an issue. The determined college graduate who noticed that her extra payments were being applied to future payments, rather than principal, made a point of straightening out these errors right away.

Another noted that she didn't feel the burden lift from her shoulders until she received the letter from her lender saying that the debt had been repaid – so make sure that you also receive such a letter, and hold on to it. After all the hard work you'll have accomplished by following the advice of these savvy individuals, you might even want to have it framed.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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