Student debt is common in many countries, but it seems that Americans have the hardest time with it. Unlike other countries where students are easily able to manage their debt, Americans treat it as a pandemic that is collectively adding up to over a trillion dollars. While it will take years to pay off the debt, there are several things that you can do to easily pay the debt off sooner. In fact, Canadian students are able to pay their debt more than three years earlier than Americans, even though the debt per student is slightly higher.
American Vs. Canadian Students Debts
Student debts are very common in developed nations, but America and Canada are close when it comes to debt per student. The average American has to pay around $24,301 by the time he or she has graduated, but the average Canadian owes around $26,297. Regardless of the country, you can easily buy a new car and still have several thousand dollars left over. However, the amount of money for outstanding debts is very different.
There’s only about $15.1 million in outstanding student loans in Canada, but $1.2 trillion in America. That’s a very significant different, and there are a few reasons for this. First of all, more Americans are still trying to pay their student loans. There are roughly 37,000,000 students still paying their loans. That’s enough people to fill Arizona State’s campus 512 times.
Another significant reason for these outstanding debts is that American students seem to have a much harder time paying their debts. Most Canadians will be able to pay their debt in less than seven years, but about 66% of Americans are on a standard 10-year repayment plan. Not only that, but many of those people won’t be able to pay the debt in full within 10 years due to financial problems. The longer repayment times also lead to higher interest payments since the lender will charge the student a small fee every month. Many students have to pay around 50% more than their original debt due to the long repayment times.
So, what can you do to manage your loans? Thankfully, there are many tips that can add up to thousands of dollars that you can put towards your debt. The best thing is to stay at home for a year or two. The standard rent for Americans is around $800 a month and about $900 a month for Canadians. This will add up to about $10,000 a year. If you live at home for two years and put all of this money towards your debt, then most of it should be gone.
Consider drinking less coffee and eating out less. If you drink just one cup of coffee a day from any coffee shop, then you’re spending about $1.38 or more. That adds up to about $500 a year. Just drink coffee from home and put the extra money towards the debt.
It might be inconvenient, unless you live in a city, but you might want to consider giving up your car for a year or two. You can save over $10,000 a year by taking public transportation because you don’t have to worry about paying for gas, insurance, maintenance or anything else.
What about changing your TV habits? Almost everyone has cable TV, but you can save a lot of money by just paying for Netflix or Hulu Plus. You’ll save around $768 a year, and you still get to watch all of your favorite shows and movies whenever you want.
Lastly, get rid of your landline to save around $400 a year. The standard landline phone will cost around $30 a month, but you can use your computer as a phone without any long-distance charges. Free online telephone service, allows you to call any landline or cell phone without charging you a cent. You’ll also get daily video content and be able to easily connect to your favorite social media platform.
It might seem almost impossible, but you can easily pay your student debt within a year or two if you just practice the right saving habits. Stay at home for a little while, use public transportation, drink less coffee (or at least buy less from coffee shops), get rid of cable and say goodbye to your landline phone That’s all it takes to save up enough money to pay your college loans in a short amount of time.