Young people across the country are facing the harsh realities of student debt. This debt is a curse, it’s a noose placed around our necks. It’s a lien on our future! And contrary to what we have been told by parents, teachers, and guidance councilors, a college education is not the definitive path to a comfortable middle class life. In fact, many college degrees are actually worthless in terms of employment prospects.
Now I’m not saying that my generation is entirely blameless for getting into this fiasco. Many young men and women have pursued trivial educational degrees in fields such as communications, musicology, or women’s studies. These fields offer easy courses and plenty of fun during college. And of course there are not that many jobs available for the holders of such degrees. Nevertheless, my blood still boils sometimes when I hear a baby boomer complaining about why the younger folks can’t just pick themselves up and do the things that people are supposed to do (e.g start a family, buy a house, get a new car…etc).
Of course we can’t do any of that because practically every young man and woman in this country is up to their eye balls in student debt. We know it’s a tough world out there, but in truth, very few people told us about the horrific consequences of educational debt. Young people come out of high school and everyone tells them that either they get a college degree or they’ll have no future. Nobody ever sat down and gave us a cost/benefit analysis of higher education.
Moreover, large numbers of my generation grew up in broken households. Without loving, responsible parents as role-models, many young people are easily influenced by a culture of over-consumption, ignorance, and sheer depravity that seems to pervade the main stream media. And when banks peddle the siren-like message that the good life can be had with 4 years of partying and a piece of sheepskin, many of us fall hook, line, and sinker for it! So what I’m trying to get at is that yes, young people are partially responsible for the predicament that we are in, BUT we are not entirely to blame for it. And it certainly doesn’t help when the older generations disparage us for mistakes that we cannot go back and undo.
And that’s enough whining for one post . Generation Y has tons of school loans and we need to somehow free ourselves from it! And despite all the cards stacked against us, I still believe that we have the courage and inner strength to spread our wings and fly. So today, I just want to throw out several strategies that some of my friends and acquaintances have used to quickly escape the nightmarish world of student debt bondage. Some of these ideas might seem unconventional, but every single strategy has actually gotten one person that I know out of massive amounts of student debt in a relatively short amount of time!
1. Work 2 or even 3 jobs
If you can’t pay off your loans fast enough, then get another job, ANY JOB. A friend of mine had a ton of student debt, aside from her day job as a teacher, she worked part time and weekends at a local super market as a bagger. All the money from the 2nd job went towards debt reduction, allowing her to pay off all of her student loans after only 4 years.
2. Live with the parents
Just live with your parents and maintain the house for them. You might have to keep the house clean and do plenty of yard work. And instead of paying rent, pay down your debt. You save bundles of money not only in rent but also in utilities, food, and parking. In effect, your cost of living could be reduced to almost nothing. One friend of mine did this for 2 years straight, in that time, he paid over 50,000 dollars towards his student debt, completely eliminating that burden from his life.
3. Get a job with the public sector
There are many government programs that will shave off a substantial amount of your student debt if you work with them. Of course government jobs do pay less than the private sector and you might be forced to relocate to poverty stricken(or disease infested) parts of the country. But depending on the amount of debt they are willing to cover, it might be well worth the effort. One friend of mine joined a specialized therapy teaching program with the department of education, and in exchange for 3 years of service, uncle Sam shaved of over 40K of his student debt.
4. Join the military!
Depending on the terms of service, you might get a very substantial student loan reduction. This is especially true if you have large amounts of Stafford loan debt. A friend of mine was able to shave off 26K worth of student debt via his service in the Air Force. Moreover, with both wars in Iraq and Afghanistan winding down, you might even survive the experience to enjoy a debt free life!
5. Volunteer at the Peace Corp
For certain degrees, a stint at the Peace Corps might shave off your student debt by as much as 70%. However you should be prepared to travel to very poor and underdeveloped areas and live a very spartan life for some years. One friend of mine was able to shave off over 20K of student debt this way.
6. Declare Bankruptcy Twice!
While Student loans are not dischargeable on the FIRST bankruptcy. However, if they are included and denied at that time and you must file a second time some years later for different debts and reasons, they can be included and will be discharged on the second bankruptcy. A friend of mine actually did this and discharged over 70K worth of student debt!
7. Renounce your citizenship and Flee the country
This is a super risky move and I question whether it is even legal. But I’ve heard of someone who did just that. He fled to Brazil with over 100K of unpaid student student debt and quickly obtained his citizenship there. His trick was to pay off the Government backed Stafford and Perkins loans and flee with only the unpaid private loans. There are apparently a lot of legal loop holes that private lending institutions needs to go through to collect money from someone in another country. My understanding is that when the cost of extraditing the person outweighs the actual unpaid debt, there will be no pursuit. Of course this guy can’t ever come back to the United States. But to my understanding, he’s debt free, married to a wonderful woman, and has a nice condo in Rio. So obviously it worked for him.
So these are the strategies that I’ve heard of. I hope you’ll find them useful. In anycase, if you know of any good student-debt reduction ideas, feel free to leave a comment!