How to Get Rid of Education Debt

Thirty-eight percent of college students took out student loans to assist them in paying for school, according to a 2007-08 report by the National Center for Educational Statistics. The same report also found the average amount owed on loans by students who attended school full-time was $24,300. To overcome the debt incurred while in college, current and former students need a plan to get rid of education debt.

Instructions

1

Consolidate student loans. Earn a lower interest rate by combining your loans. Make only one payment a month instead of several different ones by rolling all of your student loans into one massive loan. Pay ahead when possible to reduce the principal of the loan, decrease the amount of interest paid over the loan lifetime and shorten the repayment period.

2

Seek out a lower interest rate. Contact lenders to discuss refinancing your student loans to get a lower interest rate. Check with multiple banks and companies to find the lowest rate. Verify that the rate is set and doesn't vary based on federal interest rates or personal credit scores over the course of repayment. Ask each lender about any incentive programs they offer. For example, some lenders reduce interest rates on students loans by one-half percent if payments are made on time each month for two or three years. Consider any incentives that may exist when choosing a lender.

3

Check out loan forgiveness programs. Visit the website of the U.S. Department of Education's Student Aid on the Web. Read about the forgiveness programs offered to teachers and public service employees. Connect to the U.S. Health Resources and Services Administration website to learn about a student loan forgiveness program that applies to nurses working in critical nursing shortage facilities. Review the terms of the program carefully to determine if you qualify.

4

Consider volunteer service. Donate your time serving in the Peace Corp or AmeriCorp. Receive $4,725 to put toward paying off your student loans for each year of volunteer service in the AmeriCorp program. Get 30 percent of your student loan debt canceled by serving in the Peace Corp for two years. Sign on for an additional two years with the Peace Corp to get an additional 40 percent of your debt canceled.