3 Tips for Overcoming Student Loan Debt Student Loan Statistics Up to 60 percent of undergraduates take out student loans to help finance their education, and they have an average debt of $23,000. The numbers of borrowers and the average amount borrowed increases with graduate degrees. Many new graduates are unable to pay their loans when they graduate. This happens for many reasons. First, many students don't realize how much they will need to pay back each month once they graduate. In addition, some students overestimate how much money they will make once they graduate, or they overestimate their chances of finding a job in their chosen field. Up to 28 percent of students have reported that they have a great deal of difficulty paying back their loans. However, there are some strategies that a student can take to overcome their school loan debt. Choose a Repayment Plan that Works for You Many new graduates don't realize that they have options when they set up their college loan repayment plan. There are four general types of repayment plans to choose from: 1. Standard Repayment Plan - This plan is usually the first one offered by the lender. The terms of this plan include making regular, fixed payments for 10 years. 2. Graduated Repayment Plan - This plan allows the borrower to make lower payments to begin with, and then increases the amounts of the payments. 3. Extended Repayment Plan - This extended plan stretches out the payments for up to 30 years. 4. Income-Contingent Repayment Plan - This plan adjusts the amount of the payments to make them manageable for your income level. Investigate Loan Forgiveness Programs New graduates working in some fields may have the option to have some of their school loans forgiven. For example, public school teachers working in disadvantages school districts can have their loans forgiven after they make payments for 10 years. These programs have expanded since 2010, allowing more people to take advantage of them. If you aren't eligible for a student loan forgiveness program, volunteering may reduce your student loan debt. For example, participating in some volunteer programs, such as the Peace Corps or AmeriCorps, can cut thousands of dollars off your student loan debt when you agree to volunteer for a specific time period. These programs aren't for everyone because most of them represent a significant time commitment that will probably prevent you from working a regular job. However, if this volunteer experience will improve your job skills or your chances of finding employment, you may benefit from the experience as well as the loan forgiveness. Pay as Much as Possible If you are making payments on your student loans, pay as much as you can afford. Making more than the minimum required payment can significantly reduce your principle over time. When you make a payment, the late fees are paid first, then the interest that you owe, and finally, the rest of the money goes toward the principle. When you may more than the minimum amount on the loan, the amount that you pay over the minimum is directly applied to the principle. If you do this each month, you will reduce your principle much more quickly than you would if you only made the minimum payments.