×
CATEGORY
2020-01-09
Resolutions: How to Erase Your Student Loan Debt by 2025

By Kat Tretina

Kat Tretina is a freelance writer based in Orlando, Florida. Her work has been featured in publications like The Huffington Post, Entrepreneur, and more. She is focused on helping people pay down their debt and boost their income.

  If you’re like most college graduates, you left school with student loan debt. According to The Institute for College Access & Success, graduates have $29,200 in student loans, on average. Depending on your repayment term, you could be in debt for a long time. In fact, you could make payments for anywhere from 10 to 30 years.    Having such a large burden on your shoulders can cause you to put off other goals, like starting a business or buying a home. To free yourself from your student loan debt, think of repayment strategies to pay off your student loans as soon as possible.    If you’re determined to become debt-free, here’s how to pay off your student loans by 2025.   

1. Create a budget

To pay off your student loans early, you need to have a complete picture of your finances, so you know exactly how much money you have to work with. Creating a monthly budget is an essential first step.    You can use programs like Mint or You Need a Budget (YNAB) to craft a budget and track your spending. Hopefully, you make more money than you spend each month. If that’s not the case — or if money is tight— you’ll have to make some changes to your lifestyle.   

2. Cut Corners 

To free up more money for debt repayment, you’ll have to take a hard look at your expenses and make some significant cuts. These life changes are not just for recent college students or those just starting out in their careers. If you’re committed to changing your financial situation in a short amount of time, some drastic life changes may be called for. Some things to consider include: 
  • Getting a roommate: While having a roommate may not be ideal, it can be a worthwhile decision. Considering that the average one-bedroom apartment costs $1,025, getting a roommate can help you save over $500 per month. That savings could make a big dent in your student loan balance. 
  • Taking public transportation: If possible, skip buying a car and rely on buses and trains, instead. You’ll be able to save money on a car payment, insurance, and repairs for a vehicle. 
  • Moving to a cheaper area: While moving to a more affordable area isn’t feasible for everyone, it can be a great way to save money. Moving to a less trendy area or even to another state can help you drastically reduce your living expenses. 
  >> Related: U.S. Cities With the Most Student Loan Debt  
  • Cooking at home: According to the Bureau of Labor Statistics, the average American spends $3,469 per year on food consumed away from home, such as restaurants or fast food locations. If you skip eating out and brown-bag your meals, you could save thousands. 
  • Negotiating bills: You’re probably paying more than you need to for your cell phone, cable, and internet. You can use a service like Trim to negotiate your utility bills for you, reducing your monthly expenses.
 

3. Increase Your Income

Exploring ways of increasing your income isn’t just for new college graduates. Even if you’re gaining a firm foundation in your career and just want to attack your student loan debt with voracity, putting in extra work hours could accelerate your financial goals.    With a side gig, you can earn a significant amount of money. According to a BankRate survey, the average side job earns an individual $1,122 per month — which can make a big difference in knocking down your student loan debt. Here are some ideas to help you get started: 
  • Deliver groceries: If you have a car and a smartphone, you can make money delivering groceries for services like Shipt or Instacart. Depending on your location and speed, you could make up to $22 per hour. 
  • Rent out extra space: If you have a spare bedroom, closet, or empty garage, you can earn cash by renting out your extra space to locals who need to store items with Neighbor. 
  • Tutor online: If you have a computer and reliable internet, you can earn money by tutoring online. With services like Tutor.com and Chegg, you can make up to $20 per hour. 
  • Assemble furniture: If you have a knack for assembling Ikea furniture or toys, you have a lucrative side hustle. You can find clients with TaskRabbit or Takl
  • Walk dogs: If you love dogs, you can earn an hourly fee for walking them while their owners are at work. Create an account on Rover or DogVacay to get started. 
  • Work overtime: Public service officials, medical professionals, and educators can make a substantial amount of money on the side by working overtime. 
  • Offer consultation services: If you’re a savvy marketer or have a knack for e-commerce, create a side business of setting up social media accounts for local businesses. 
 

4. Research Student Loan Repayment Assistance Programs 

Depending on your major and location, you may qualify for student loan repayment assistance.    For example, highly qualified teachers who teach for at least five years at an eligible school can receive up to $17,500 in loan help through Teacher Loan Forgiveness, a federal program.    Healthcare providers in Pennsylvania can receive up to $100,000 in student loan aid through the state’s Primary Care Loan Repayment Program. In exchange, participants must agree to a service term in a high-need area.    In Florida, lawyers who work for a legal aid organization can receive up to $5,000 per year through the Loan Repayment Assistance Program   To find programs you may qualify for, check out the federal government’s list of forgiveness programs, and visit your state’s Department of Education website.   

5. Use Windfalls Strategically

Using windfalls — unexpected influxes of cash — strategically can cut off years from your loan term.   For example, the IRS reported that the average tax refund in 2019 was $2,860. To put that number in perspective, let’s say you had $30,000 in student loans with an interest rate of 5% and ten years left in your repayment term. If you made a lump sum payment of $2,860, you’d pay off your student loans 14 months early. And, you’d save $1,722 over the length of your loan.   

6. Consider Student Loan Refinancing

If you’re determined to pay off your debt as quickly as possible, student loan refinancing can be a smart strategy.    To refinance student loans, you work with a private lender like ELFI* to take out a new loan for the amount of your existing debt. The new loan has different repayment terms than the old ones. You’ll have a new interest rate, loan term, and minimum monthly payment.    If you have good credit and steady income, you could qualify for a lower interest rate and save money.    Let’s say you had $35,000 in student loan debt at 7% interest with a 10-year repayment term. By the end of your repayment term, you’d pay a total of $48,766. Interest charges would cause you to pay back $13,766 more than you originally borrowed.    If you refinanced your student loans and qualified for a 10-year loan at just 5% interest, you’d repay $44,548. Refinancing your debt would help you save $4,218.    ELFI’s Student Loan Refinance Calculator can help you determine how much you could save by refinancing.  

7. Avoid Lifestyle Inflation

As your career advances and you start to pay off some of your loan debt, you might be tempted to splurge on a new car, bigger apartment, or fancier electronics to reward yourself. However, try to avoid the urge. Instead, allocate any extra money you have toward your loan payments. You’ll pay off your student loans faster, so you can become debt-free and enjoy more freedom.   

The Bottom Line

While your debt may be stressful, you can conquer it by coming up with detailed student loan repayment strategies. With some sacrifice and hard work now, you can eliminate your debt years ahead of schedule.   If you decide to refinance your student loans, use ELFI’s “Find My Rate” tool to get a rate quote, without impacting your credit score.  
 

*Subject to credit approval. Terms and conditions apply.

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

Photo of legal scales
2020-01-08
What is Debt-to-Income Ratio? (Video)

The Debt-to-Income Ratio (DTI) lets you see how your total monthly debt relates to your gross monthly income. Your gross monthly income is your total income from all sources before taxes and other deductions are taken out.   Learn more about the importance of DTI and the role it plays in qualifying for student loan refinancing in the video below.  

 

Learn More About Debt-to-Income Ratio (DTI)

 

  Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.
young woman budgeting by tacking spending in coffee shop
2020-01-07
Financial Goals 2020: Tracking Your Spending

This blog has been prepared for informational purposes only and does not constitute tax or financial advice. Please consult your tax advisor for guidance on your personal tax situation.

 

Whether it’s losing weight, going back to school, trying a new sport, or getting your finances in order, there’s no better month than January to refocus your body and mind. Right now, it’s a new year and a new decade so you’re not just resetting for the next 12 months, you’re kicking off the next 10 years, and the resolutions are more important than ever. If tracking your spending is at the top of your goal-setting list—especially after an indulgent holiday season—check out our budgeting tips below.

 

Budgeting Platforms

When it comes to budgeting, the tedious spreadsheets of yesterday are long gone. There are apps and online programs to make tracking your spending in 2020 a breeze. Mint is a simple (and free) budgeting planner and finance tracker that connects with your bank accounts and credit cards to help you see all account activity in one place. You can access Mint with your computer or phone to:

  • See spending across categories (like shopping, gas, eating out, etc.)
  • Create realistic budgets based on past spending habits
  • Set reminders for bills
  • Check your credit score
  • And more

While Mint is more of a look back at your past spending, you can also try more forward-thinking but paid-for budget tools like YNAB (You Need A Budget). Like Mint, this platform seamlessly connects to your accounts to help you see spending trends and automate budgeting, but it’s also more educational. To help you track your spending, YNAB focuses on four rules of budgeting:

  • Give Every Dollar A Job – don’t buy on a whim, be sure every dollar is assigned a task, whether it’s for eating out or paying student loans.
  • Embrace Your True Expenses – each month, set aside money for those big, inevitable expenses like car repairs and the holidays. Then you aren’t in a bind when they hit.
  • Roll With The Punches – if you splurge, avoid being riddled with guilt by simply reallocating funds from another category. Do it, and move on.
  • Age Your Money – Never spend money that’s less than 30 days old (i.e., you should be paying this month’s bills with last month’s paycheck)
 

What Refinancing Student Loans Does For Your Budget

Regardless of which platform you chose, it’s important to see spending in categories to help you understand where the majority of your paycheck goes. If you’re a recent college graduate or parent of a graduate, student loans can be one of the biggest categories in your budget. Refinancing student loans can give you a lower monthly payment, freeing up money for other categories. This helps you uphold the “Roll With The Punches” rule of reallocating money from one category to the other when “Whoops!” moments happen with your spending.

 

ELFI customers have reported saving an average of $309 every month and an average of $20,936 in total savings after refinancing student loans with Education Loan Finance.1 That’s a big chunk of change that can be added to one spending category or divided up among several, all while still making payments on your student loan debt.

 

On the other hand, if you finalize your 2020 budget and realize you have extra money in other categories, you can choose to pay down your student loan debt by making additional or larger monthly payments. This concept of overpaying can cut your loan repayment time in half.

 

>> Related: Should I Save or Pay Down Student Loan Debt

 

If you’re thinking about refinancing student loans to help with your 2020 budgeting, check out our Student Loan Refinance Calculator to see just how much you could save by working with ELFI. You can also review the benefits of student loan refinancing on to see how ELFI can work for you.*

 
 

*Subject to credit approval. Terms and conditions apply.

 

1 Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon several factors.

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

looking back in rear view mirror
2020-01-06
7 Top Student Loan Moments From the Past Decade

2019 has come to an end, which means it’s the end of another decade. The past 10 years have been staggering in terms of changes to the student loan system. From 2010 through 2019, student loan debt reached an all-time high, new repayment plans were introduced, and the Department of Education cracked down on for-profit schools. Here are seven of the most significant student loan moments of the past decade.

1. The government introduces changes to income-driven repayment plans

Income-driven repayment (IDR) plans were first introduced in 1994. With an IDR plan, federal loan borrowers could reduce their monthly payments, making the payments more affordable. But over the past 10 years, the Department of Education made significant changes to IDR plans
  • Pay As You Earn: In 2010, the government introduced Pay As You Earn (PAYE). Under this program, borrowers’ payments would be capped at 10 percent of their discretionary income, and they would receive loan forgiveness after making payments for 20 years. 
  • Income-Based Repayment: The government updated Income-Based Repayment (IBR) in 2014. With the new guidelines, borrowers would pay 10 percent of their discretionary income, and receive loan forgiveness after 20 years. Only available to borrowers who took out loans after July 1, 2014, the payments under the new IBR plan would never exceed what the payment would be under a 10-year Standard Repayment Plan. 
  • Revised Pay As You Earn: The Department of Education launched Revised Pay As You Earn (REPAYE) in 2015. With REPAYE, borrowers’ payments are limited to 10 percent of their discretionary income. For undergraduate borrowers, the loans would be forgiven after making payments for 20 years. For graduate borrowers, the loans would be forgiven after 25 years.
 

2. National default rate reaches 11.5%

In 2014, the national federal student loan cohort default rate — a measure of how many borrowers of Federal Family Education Loans or William D. Ford Federal Direct Loans defaulted on their debt — hit 11.5%, an all-time high. Of the millions of students who entered repayment, hundreds of thousands defaulted on their loans, meaning they didn’t make payments for at least 270 days.    According to the most recent data, the default rate has decreased slightly to 10.8%. However, student loan default remains a major issue for thousands of borrowers amidst the student loan debt crisis.  

3. Department of Education announces Borrower Defense to Repayment

Over the past 10 years, several for-profit schools have been sued due to misleading tactics. Millions of students were left with student loans and a degree that couldn’t help them secure a job.    In 2016, then-President Obama’s administration announced new regulations that were designed to protect borrowers from institutional misconduct. Called Borrower Defense to Repayment, the new regulations allowed borrowers to have their loans discharged if the school was found guilty of fraud, or if the school gave the borrower misleading information.    Borrowers who think they are eligible can apply for Borrower Defense to Repayment online.  

4. First borrowers become eligible for loan forgiveness through Public Service Loan Forgiveness

In 2017, the first borrowers became eligible for loan forgiveness under Public Service Loan Forgiveness (PSLF). While the program was launched in 2007, borrowers have to work for a qualifying non-profit organization or government agency for 10 years while making payments on their loans to be eligible for PSLF.    Was the program successful? That depends on your perspective. As of June 2019, over 90,000 borrowers submitted PSLF applications. But to date, only 1,216 applications for loan forgiveness have been approved.  That means 99% of PSLF applicants are rejected.   

5. Student loan debt crosses $1.5 trillion mark

In the first quarter of 2018, the national outstanding student loan debt reached $1.5 trillion for the first time in history. If that doesn’t sound that remarkable to you, consider that the total outstanding loan debt was just $600 billion a decade ago. In only 10 years, national student loan debt more than doubled.    Student loans are more prevalent than ever. According to The Institute for College Access & Success, 65 percent of college seniors who graduated from public and private colleges in 2018 had student loan debt. On average, borrowers had $29,200 in student loans.  

6. Several for-profit schools close down

Over the past decade, for-profit schools have faced increased scrutiny and pressure from the U.S. Department of Education. As a result, several of the biggest for-profit schools closed down.   
  • Corinthian College: A school that operated 28 campuses across the country, Corinthian College closed in 2015. The closure came after the Department of Education fined the school for misrepresenting job placement rates. Over 16,000 students were affected. 
  • ITT Tech: In 2016, ITT Tech shut down its 130 campuses, impacting over 43,000 students. The closure came after multiple federal sanctions and after the Department of Education prohibited the school from enrolling new students who use federal financial aid. Students affected by the closure could pursue closed-school discharge, with over $500 million in federal student loans at stake. 
  • Education Corporation of America: In 2018, the Education Corporation of America shut down its 70 campuses, leaving over 19,000 students scrambling for solutions. The closure occurred after the Accrediting Council for Independent Colleges and Schools suspended the school’s accreditation over concerns about institutional management and student progress. 
 

7. President Trump grants automatic loan forgiveness to disabled veterans

In 2019, President Trump signed a Presidential Memorandum to help totally and permanently disabled veterans with their student loans. With the new process, the Department of Education would automatically forgive the federal loan balances belonging to eligible veterans under Total and Permanent Disability Discharge   Previously, veterans could qualify for Total and Permanent Disability Discharge. However, the process required veterans to know about the program and fill out extensive paperwork. Under President Trump’s order, their loans were eliminated automatically, simplifying the discharge process.  
timeline of top student loan moments from the 2010s decade Timeline depicting the top student loan moments from the past decade.
[caption id="attachment_22869" align="aligncenter" width="1200"][/caption]  

Looking ahead

The past decade produced major changes to the student loan systems. As the 2020 election nears, more and more politicians will be paying attention to student loan issues since they impact millions of borrowers. Many presidential candidates will be introducing their educational policy proposals, which could signal new changes for borrowers in the next few years.  
 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

Young man reading an article on his phone and listening to podcasts while traveling by train.
2020-01-03
This Week in Student Loans: January 3

Please note: Education Loan Finance does not endorse or take positions on any political matters that are mentioned. Our weekly summary is for informational purposes only and is solely intended to bring relevant news to our readers.

  This week in student loans:

New App, Pillar, Brings Crowdsourcing to Student Loan Debt Repayment

Former MBA student Michael Bloch founded Pillar in 2018 with the goal of helping tackle the national student debt crisis. The personal finance app links to student loan and bank accounts, analyzes income and spending patterns and customizes payment plans for each enrollee, then facilitates payments to the loan servicer through the app. Late last month, Pillar launched "Boost" to introduce crowdsourcing as a solution to student loan debt. The service allows friends and family to gift loan payments.  

Source: Yahoo Finance

 

Student Loan Debt Increased 107% This Decade

The Federal Reserve collected data that showed a 107% increase in national student loan debt over the past decade, an increase from $772 billion in 2009 to nearly $1.6 trillion today. The article also reveals additional interesting data surrounding the current status of national student loan debt.  

Source: CNBC

 

Student Loan Debt is Ballooning for Those 50 and Older

While the national student loan debt crisis is typically thought to mainly affect millennials, Americans aged 50 and older are also seeing a significant rise in student loan debt, a Detroit Free Press article revealed. Nationwide, student loan borrowers in their 60s owed $33,811, and retirees are the fastest growing group of student loan borrowers across the nation.  

Source: Detroit Free Press

 

Business Insider Writer Shares 6 Mistakes They Made While Paying Off $81,000 in Student Loans

After borrowing a total of $81,000 to complete two degrees, Business Insider columnist Melanie Lockert reflects on the six major mistakes she made while repaying her debt in full over 9 years. These mistakes could be considered somewhat common and could be useful to individuals in the midst of paying down debt.

 

Source: Business Insider

  That wraps things up for this week! Follow us on FacebookInstagramTwitter, or LinkedIn for more news about student loans, refinancing, and achieving financial freedom.  
 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

2020-01-02
Should I Save or Pay Down Student Loan Debt?

This blog has been prepared for informational purposes only and does not constitute financial advice. Always consult a professional for guidance around your personal financial situation.

  Whether it comes as a check from grandma, a bonus from work, or a tax return, extra money in your bank account is a great feeling. However, it can be surprisingly difficult to decide what to do with that extra cash. You’d be tempted to spend the cash frivolously, like booking a much-needed vacation or splurging on eating out. But if you’re in debt, you know that money belongs elsewhere. The only question you should face when you come into a windfall is whether to contribute to savings or pay extra on your student loan debt. Luckily, that question is relatively easy to answer.  

Save First. Pay Student Loan Debt Second.

Saving money—to a point—is necessary to ensure you’re prepared for unexpected financial emergencies. Car accident? Broken bone? Laid off? You need a “rainy day fund” so you can pay the bills when life challenges you without warning. By not saving, you could end up living on credit cards with interest rates that are likely two or three times higher than your student loan debt. Then you’re burdened with even steeper financial obligations to pay off.     It’s recommended that you save at least six months of your current salary to be fully prepared for emergencies. Once you get your savings stockpiled, turn your attention to paying down student loan debt.   To explore why this is the case, consider savings accounts usually offer rates around 2%. However, your student loan debt likely comes with an interest rate of around 4%-7% interest if you have loans through the federal government. If you keep depositing money in your savings account instead of reducing your loan balance, you accumulate more debt (in interest owed) than you save.     Basic savings accounts are fairly safe—your balance only grows, as long as you don’t withdraw money from the account. The payoff for this safety is a lower interest rate. Low risk equals low reward.    So, you might be thinking, “What saving options make me more money?”    Related: Yes, You Need A Side Hustle  

Are Stocks worth the investment?

Stocks are a popular option that is high risk and high reward. When you buy stock in a company, you own a piece of that company. The benefit for them is that your money is an investment in developing new products and other growth-based projects. The benefit for you is that your money could grow with the company. The downfall, however, is that your money can be depleted if the company’s stock takes a downturn.    Stocks can also be an intimidating game since companies like Alphabet (Google) and Amazon generally sell for more than $1,000 a share. However, some companies like Robinhood are trying to make stocks more accessible to the everyday investor, highlighted with their soon to be released fractional share trading options. With the new feature, you can buy one-millionth of a share or just $1 worth of any stock.  

Could I place savings in a CD?

A more middle-of-the-road option is a CD. Not to be confused with a compact disc, these Certificates of Deposit are savings accounts that are typically federally-insured and usually have higher interest rates than traditional savings accounts. The beauty of placing your money in a CD is that it becomes harder to spend your money frivolously since there are predetermined dates for withdrawal. Common terms are 3, 6, 12, and 18-months, with penalties assessed if money is withdrawn before the maturity date.   

Ready to Save But Short On Funds?

Saving and paying off debt is great...when you have the extra cash to do so. But not everyone has a wealthy grandma or job that comes with a bonus. Here are some quick ways to save.   Student loan refinancing through companies like ELFI* could free up more money by lowering your monthly payment through loan consolidation and a lower interest rate. In fact, customers reported saving an average of $309 every month and an average of $20,936 in total savings after refinancing student loans with Education Loan Finance.   Related: 7 Benefits of Refinancing Student Loans   You could also save hundreds of dollars a month after canceling unused subscriptions. Banks or apps like Truebill and Trim can help you find and cancel subscriptions that are unused or that you forgot you signed up for in the first place. These apps also connect to your bank account to make automated weekly money transfers into a savings account. With automated transfers, think small—just $25 a week can turn into $1,300 a year.   Apps like Acorns can make your investments even more simple by setting aside leftover change from purchases you make. With the Acorns debit card, the spare change from each purchase is placed in an investment account of your choosing. And when you shop via the Acorns app or Chrome Extension at 350+ retail partners, a percentage of your total purchase is deposited into your selected savings account.    At ELFI, we work hard to help you reduce student loan debt with great student loan refinancing options. By refinancing student loans with ELFI, you can pick the payment plan and terms that fit your life. See what you could save with our quick, no-obligation quote.  
  *Subject to credit approval. Terms and conditions apply.   ¹Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon several factors.   Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.
2019-12-31
4 New Year’s Resolutions You Can Actually Keep

The New Year is upon us – it’s a time for celebration, reflection, and inevitably, for setting resolutions. From achieving financial goals such as repaying student loan debt to health-related goals such as losing weight, we are often pressured to set bold aspirations for the upcoming year. But despite the popularity of setting New Year’s resolutions, they can be fairly difficult to stick with if you set your goals too high or merely set them out of obligation. You can set goals at any time in your life, for any reason, and a new year doesn’t have to always mean a completely new you.    For the sake of taking some of the burden off of the holiday, we’re listing out some New Year’s resolutions you can keep through the year – and feel great about, too.  

Start Volunteering

Volunteering isn't just for students looking to build their resume. Volunteering for causes you believe in is a great way to build friendships, keep busy, and make connections in your community. Volunteer Match is a great place to find opportunities to support charities, nonprofits, organizations and causes near you. Volunteering will leave you feeling empowered and more fulfilled through knowing you've made an impact. Consider taking on the New Year with less stress about adding to your own life and shift the focus to giving back!  

Stop Procrastinating... As Much

Here's to making 2020 the year of getting ahead. While it can sometimes be difficult to not put work off until the last minute, make a resolution to spend your free time getting ahead on things – in the end it will leave you with less stress and more free time than you intended on having. Sometimes this requires a shift of mindset, but it is doable. Make 2020 the year you start putting your top priorities first.  

Don't Sweat the Small Stuff

No matter your goals for the upcoming year, understand that great things take time. Focus on making improvements where you can and don’t let minor setbacks take you off track. Life can come at you quickly, so it’s important to keep a level head and understand that most bad things are temporary and will pass. Enter 2020 with a plan for managing stress, taking things one step at a time, and having patience – you may just find that this is the most effective resolution you can set.  

Revisit Your Resume

While you may be happy with your current job and plan on sticking with it, a new year is a good reason to give your resume a tune-up. What skills have you acquired over the previous year? How many years of experience do you now have in your field? Taking stock of what you bring can help you gain a new understanding of the salary you deserve, make you feel accomplished for how far you've come, or even help you set goals for your professional life in the year to come.   There you go! Now you have four New Year's resolutions that you can start in 2020 and keep throughout the year. Hopefully these simple, achievable resolutions take some stress off of your holiday and allow you to look into 2020 with a positive and stress-free mindset.  
  Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.
2019-12-27
U.S. Cities With the Most Student Loan Debt

By Kat Tretina

Kat Tretina is a freelance writer based in Orlando, Florida. Her work has been featured in publications like The Huffington Post, Entrepreneur, and more. She is focused on helping people pay down their debt and boost their income.

 

You’ve heard it on the news: student loans are a national epidemic. According to Experian, Americans carry $35,359 in student loan debt, on average. However, where you go to college and where you live can have a big impact on how much you need to borrow to pay for school and how much you’ll owe after graduation.

 

10 Metropolitan areas with the highest levels of student loan debt

While student debt is pervasive, it affects some metropolitan areas more severely than others. Experian reported that people who live in or near college towns tend to have the highest student loan balances.

To understand where education debt is the worst, we looked at 10 cities with the highest average levels of student loan debt based on Experian’s latest data.

   

10: Charlottesville, VA

Average Student Loan Debt: $42,476

 

Charlottesville is home to a number of universities and colleges including the American National University and the University of Virginia.

 

Among people aged 25 years and up, 54 percent have a bachelor’s degree or higher. That’s far greater than the 37 percent of all Americans who have earned a bachelor’s degree or higher.

 

The large number of people with a degree is likely why people working in Charlottesville earn more money than the typical person, too. The median income for all Americans is $32,838. In Charlottesville, that number jumps to $36,400.

 

The biggest industries in Charlottesville are management and business services, accommodations and food service, and sales.

 

Related: The Average Cost of College

   

9. Atlanta-Sandy Springs-Marietta, GA

Average Student Loan Debt: $43,290

 

There are dozens of universities in the Atlanta area, including Georgia State, Emory University, and Morehouse College.

 

Atlanta residents tend to be highly educated; over 43 percent of its population has a post-secondary degree. That benefit turns into higher salaries. The median earnings for the area is $38,400.

 

Finance, healthcare, and manufacturing are three of the biggest industries in the region. The largest employers, based on employee headcount, are Northside Hospital, The Home Depot, Emory University & Emory Healthcare, and Delta Air Lines.

   

8. San Francisco-Oakland-Fremont, CA

Average Student Loan Debt: $43,674

 

Many well-known and expensive universities are located in or near San Francisco, such as Stanford University and the University of California, Berkeley.

 

The Bay Area in California — which includes San Francisco — has grown by 600,000 people since 2010. That growth is because the San Francisco metropolitan area is the base for many major companies, including Salesforce, Wells Fargo, and Uber.

 

Because of the prestigious employers in the area, San Francisco has much higher levels of degree attainment. Over 53 percent of the population has a post-secondary degree, and the median earnings are $50,900.

 

Related: Best Cities for Young Professionals

   

7. Washington D.C.-Arlington-Alexandria, DC, VA, MD

Average Student Loan Debt: $43,797

 

The Washington D.C. area has many elite universities and colleges, including Georgetown University and American University.

 

The biggest industries are government, public school administration, and healthcare. To succeed in these fields, you need higher education, so it’s no wonder that over 58 percent of the population has received a college degree.

 

The median earnings are $56,700. However, the cost of living in Washington D.C. is quite high, so people may struggle to afford both their living expenses and student loan payments.

   

6. Santa Barbara-Santa Maria-Goleta, CA

Average Student Loan Debt: $44,294

 

If you live near Santa Barbara, you may have gone to school at the University of California, Antioch University, or Westmont College.

 

The top industries in the area are in education, hospitality, and healthcare. Major employers include the Four Seasons, the University of California, and Pacific Diagnostic Lab.

 

About 52 percent of the population has a college degree, and the median earnings are $38,800.

   

5. Gainesville, FL

Average Student Loan Debt: $44,508

 

Gainesville, a city in northern Florida, is well known as the home of the University of Florida. It’s a relatively small college town, with just over 133,000 residents.

 

Over 52 percent of Gainesville residents have a college degree. However, the median income is lower than the national average, mostly because the biggest employers are in the service and retail industries, which can have lower wages. In Gainesville, the median income is just $30,800, which can make repaying your student loans difficult.

   

4. Santa Cruz-Watsonville, CA

Average Student Loan Debt: $45,396

 

The Santa Cruz area has one major college: The University of California-Santa Cruz. It’s also one of the region’s biggest employers, along with local government and administration offices and hospitals.

 

More than 50 percent of the metropolitan area’s population has a bachelor’s degree or higher. The median income for Santa Cruz is $40,200.

   

3. Ann Arbor, MI 

Average Student Loan Debt $45,668

 

Located outside of Detroit, Ann Arbor has a number of universities in it. The largest is the University of Michigan, which has over 28,000 undergraduate students.

 

Besides being the biggest school, the University of Michigan is also the area’s top employer, followed by Trinity Health and Ann Arbor Public Schools.

 

Ann Arbor has the highest percentage of college educated people on this list; 72 percent of the population have a bachelor’s degree or higher. With so many people getting degrees, it’s no surprise that Ann Arbor is among the top three in terms of student loan debt.

 

Read More: 5 Financial Tips for After You Refinance Student Loans

   

2. Corvalis, OR

Average Student Loan Debt: $46,164

 

Oregon State University is based in Corvalis, with over 24,000 undergraduate students enrolled. Corvalis is a relatively small town, with just over 50,000 residents, so the University is a major economic driver for the area.

 

Oregon State University is the biggest employer, followed by the Good Samaritan Regional Medical Center and Hewlett Packard.

 

Corvalis has a remarkably high number of people with college degrees. Over 61 percent have a post-secondary credential. However, the median earnings are relatively low; it’s just $36,100.

   

1. Durham, North Carolina

Average Student Loan Debt: $47,955

 

Known for its technology and educational facilities, Durham has a number of elite universities in or near the city. Some of the biggest schools include Duke University, the University of North Carolina at Chapel Hill, and North Carolina Central University.

 

Those schools can be quite expensive. A single year at Duke University for an undergraduate student can cost $78,608 before financial aid. With such steep tuition fees, it’s no wonder that Durham leads the country in student loan debt.

 

Over 48 percent of the population has at least a bachelor’s degree, and the median earnings are $37,000.

 

Paying Off Your Student Loans

Whether your city is one of the 10 cities with the most student loan debt or not, paying off your education loans is key to your financial freedom. If you’re looking to pay off your debt as soon as possible and save money, consider student loan refinancing.

 

You can use ELFI’s Find My Rate tool to get a rate quote without affecting your credit score.*

   
 

*Subject to credit approval. Terms and conditions apply.

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

2019-12-26
Don’t Sweat the Small Stuff: The Income vs. Savings Approach to Building Wealth

By Caroline Farhat   We all remember that infamous Australian millionaire who declared that millennials can’t afford to buy homes because they’re wasting all of their money buying avocado toast. Similarly, we’ve probably all lost count of the number of times we’ve heard that we need to cut back on our Starbucks® habit in order to be more financially successful.    While buying avocado toast every morning might not be the wisest choice for your food budget, it’s most likely not going to hold you back from having a healthy bank account either. In fact, if you’re so busy pinching pennies on your daily cappuccino and not looking at how you can save and increase your earnings in bigger areas, you’re probably wasting both your time and money.   

Stop Skipping Your Cappuccino and Refinance Instead

 

1. How refinancing can save you money on your mortgage

According to the Bureau of Labor Statistics, housing is the largest expense for Americans, taking up about 33% of income and $20,091 per year. For homeowners, these figures include the cost of the mortgage, mortgage interest, property taxes and insurance, and expenses for maintenance and repairs.    When you apply and pay for a mortgage, you get an interest rate based on your creditworthiness, the size of your down payment, loan term and type, and economic factors. For example, in 2000, the average mortgage rate was 8.05%. In 2018, the average mortgage rate was 4.54%. As you can see, market conditions can make a big difference in the interest rate you lock-in. The good news is that you have the ability to lower your mortgage rate through refinancing, well after you sign on the dotted line.    Mortgage interest, and its effect on your monthly housing bill, can be easily forgotten -- until you start crunching the numbers. Let’s walk through two scenarios -- one in which you don’t refinance and one in which you do refinance.  

Scenario 1: No refinancing

You buy a $300,000 home and put down 20% ($60,000). You get a mortgage for $240,000 with a 4.5% interest rate. Over the first year, you will have spent $10,720.79 on interest payments alone. Over the entire 30-year mortgage term, you will have spent $197,776.11 in total on interest payments.    Now, let’s see what happens if you refinance your mortgage.  

Scenario 2: Refinancing

You buy a $300,000 home and put down 20% ($60,000). While you started with a 4.5% interest rate, shifts in the economy have caused interest rates to drop and you’re now able to refinance to a 3.7% mortgage rate. By doing so, you will save over $12,000 over the life of the loan. To put this in perspective, you’d have to cut back on approximately 3,000 drinks at your favorite coffee joint to save that kind of money.    If you currently have a mortgage, put your numbers into this refinance calculator and see just how much you could save.   

2. How to save by refinancing student loans

The Bureau of Labor Statistics also reports that the average American spent $1,417 on education in 2018. If you’re currently reading this blog, you are likely dealing with a much larger number than that. If you have at least $5,000 in student loan debt, student loan refinancing could be extremely beneficial for you.    Similar to mortgages, you can refinance student loans and potentially save thousands of dollars over the lifetime of the loan. ELFI customers reported saving an average of $309 every month and an average of $20,936 in total savings1.   The first step to saving money on your student loans is to determine whether student loan refinancing* is the best option for you. In a small number of cases, refinancing is not the optimal option. But for most student loan debt holders, it is an excellent way to save money both in the short term and long term. Our student loan refinance calculator allows you to see what you could save in your particular situation. Let’s walk through an example.  

Scenario 1: No refinancing

You have $60,000 in student loans with an interest rate of 6.8% and are on a standard repayment plan of 10 years. You pay $690 per month and never consider refinancing. In total, you will pay $82,857 for your initial loan of $60,000. Over $22,000 of that amount will be to interest payments alone.  

Scenario 2: Refinance your student loans

You have $60,000 in student loan debt with an interest rate of 6.8% and a monthly payment of $690. You’re eager to optimize your finances and decide to refinance your student loans to a lower interest rate, saving up to $18,000 over the life of the loan. If you refinance into a shorter loan term (such as a 5 or 7-year term), you will save more on interest over the life of the loan. Alternately, you may consider stretching out your terms to lower your monthly payment. This will likely still save you money over the long term, but be sure to crunch the numbers before you make a final decision on your refinancing terms.  

Side Hustle or Climb Your Way to Success

Saving on big-ticket items like your housing costs or student loan debt is just one approach to building wealth. After you have taken advantage of all the saving opportunities available to you, it’s time to turn your attention to increasing your earnings. Here are a few ways you can bolster your bank account:
  • Ask your current employer. If you’re gainfully employed and a top-performer, speak with your boss about the potential for a promotion, raise, or bonus. It’s best to come into these types of conversations with a concrete strategy and multiple examples of positive ways you have impacted the company. Glassdoor has a good guide on how to prepare for this conversation. 
  • Find a new job. Long gone are the days people spend decades at the same company. While “job hopping” may have had a negative connotation in the past, many career experts actually encourage people to switch jobs more frequently in order to get a larger salary and more advanced job title. According to this Fast Company article, “workers who stay with a company longer than two years are said to get paid 50% less.” Money, of course, isn’t everything. But if you’re feeling stagnant both in learning and money, it’s probably time to brush off your resume and start looking for a new position.
  •  Start a side hustle. It’s reported that more than 1 in 4 Americans currently have a side hustle. Beyond the monetary benefits of having a gig outside of your normal 9-to-5, side hustles are also a great way to hone or discover a new passion. Side Hustle Nation has an extensive list of ideas that you can start quickly. 
 

Bottom Line

It pays (literally) to keep your eye on the big stuff. That’s not to say that you shouldn’t ever watch your pennies. Smart spending habits still reign supreme. Just don’t sweat the small stuff so much that you miss out on potentially huge savings.  
  *Subject to credit approval. Terms and conditions apply.   Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.   1Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon several factors.