A whopping 43.5 million Americans owe money in student loan form. And all told, U.S. student loan debt amounts to $1.78 trillion.
But while student debt is a problem on a national level, some states have it worse than others. California, for example, has the dubious distinction of being the state with the largest total student debt burden.
All told, California borrowers owe $149 billion in student debt. By comparison, Texas, the state with the next-largest amount of student debt, has borrowers owing a total of $126 billion.
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But the reality is that no matter where you live or what your personal pile of student debt amounts to, it's in your best interest to shed it as quickly as possible. Doing so could actually make a huge difference when it comes to other long-term goals.
Accelerate those payments if you can
Student loan borrowers pay interest on their debt the same way auto and personal loan borrowers pay interest on the sums they borrow. So the less time it takes you to pay off your debt, the more interest savings you stand to reap.
But that's not the only reason to try to shed your student debt ahead of schedule. Another reason is that the sooner that debt is gone, the sooner you can being to focus on other long-term financial goals.
Right now, the average monthly student loan payment is $337. But let's say you were able to cut your spending and perhaps work a side job to pay off your student debt at age 27 instead of 32.
Now, let's imagine that once that student debt is gone, you're able to put your $337 into a retirement plan every month instead. If you invest that money at an average annual 8% return, which is a bit below the stock market's average, by age 67, you'll have a little more than $1 million.
By contrast, if you wait until age 32 to start saving that $337 a month for retirement, you'll end up with closer to $700,000 for retirement, assuming that same average annual 8% return. Now that's not a shabby nest egg by any means. But wouldn't you rather retire with more than $300,000 extra if possible?
That's why it's a great idea to get ahead of your student debt if you can. If your monthly loan payments are very high and your income isn't, accelerating your repayment schedule may not be feasible. But if you've managed to secure a decent wage and are willing to live frugally, you might be able to whittle down your debt sooner.
Similarly, if you're willing to take on a second job, it could be your ticket to wiping out your student loan balance years ahead of schedule. And in addition to the financial benefits, you might also reap some mental health benefits upon freeing yourself from the burden of student loan debt.
Of course, working a side gig means sacrificing precious downtime, and that's not an easy thing. But it could shave years off of your student loan repayment plan, and in that regard, it may be more than worth it.
