The state of student loan debtNew research shows
that student loan debt is now the second-largest consumer debt category, behind only mortgage debt. There are more than 44 million borrowers with a total of $1.3tn in student loan debt in the United States alone. On average, 2016 graduates finished with $37,172 in debt. And when you consider stagnant wages and limited opportunities for young professionals, it shouldn’t come as a surprise that the student loan delinquency rate is 11.2%.
What few realise is that the burden of student loan debt is killing innovation in this country. A recent analysis by the Wall Street Journal found that the number of entrepreneurs under the age of 30 who own their own business is at a 24-year low
While there are many possible culprits, it’s easy to see how debt is stifling the entrepreneurial spirit. “Millennials deserve a fighting chance to start small businesses but student loans are holding us back,” says Amanda Golden
, co-owner of a design company in Columbus, Ohio. “It’s hard to grow a business when your monthly student loan payments exceed your monthly mortgage bill.”How to break free and become successful
Fortunately, all is not lost. While student loan debts are a problem – and something needs to be done to reform the mess we’re in – there are ways for ambitious entrepreneurs to break free from these shackles. In fact, here are some specific tips and strategies to get you moving forward.1. Stop paying the minimum
The worst thing you can do is pay the minimum on your student loan debt. It’s not going away and the longer it sits there, the more interest you’ll be forced to hand over. You might not have a ton of room in your budget, but once you tighten things up, you’ll find some extra money. Your student loans aren’t going to miraculously disappear. Tackle them as quickly as possible and you’ll be out from underneath them sooner than you ever thought possible. 2. Try student loan consolidation
Do you have a bunch of different student loan debts stressing you out? Are your interest rates higher than the going rate? Consolidating may be in the cards.
“With student loan consolidation, you get a new loan to pay off your existing student loans. If this new loan has a lower interest rate, it can lower your monthly payments and decrease the amount of interest you pay over time,” ConsolidateStudent.Loan explains
. “Beware, however, of consolidation loans that increase the amount of time you have to pay back your loan, lowering payments but increasing the cost of the loan over time.”3. Become a funding expert
No matter what, it’s going to take a few years to pay off your debts. If you can’t wait to pursue your entrepreneurial dreams until after you’re debt-free, then you’ll have to get creative about funding your business. Be willing to get creative – and don’t go into more debt
!Take control of your career
One of the beautiful things about America is that anyone can start a business. Success isn’t guaranteed by any stretch of the imagination, but you have the opportunity to build something. At times, student loan debt can feel like it infringes on your right to entrepreneurship, but it doesn’t have to. It’s time to reframe the way you view the situation and start clawing your way out.