- June 18, 2019
Robert F. Smith during the Morehouse College Commencement on May 19, 2019 in Atlanta, Georgia. (Marcus Ingram Getty Images)
The crowd erupted as billionaire Robert F. Smith announced at Morehouse’s commencement exercise this year that his family would pay off all student loans for the graduates. Even one of our own from The Bahamas is set to benefit from this generosity, and surely, this act of kindness will give them all an auspicious start as they embark on their journey.
At the core of the graduates’ excitement was the fact that they no longer have to be burdened with repaying a student loan. However, the issue of repaying student loans has been looming for some time in our country. In January 2019, the Government of the Bahamas announced that they will be coming after delinquent borrowers to reclaim over $100,000,000 owed in student loans granted by the Education Loan Authority. And let’s not forget about the many student loans in default at local financial institutions and other lending agencies.
If you have a student loan, here are a few steps you can take to get rid of it quick, fast, and in a hurry.
Take it seriously – No seriously, this is the first step! Your student loan isn’t going anywhere if you pretend that it doesn’t exist or isn’t significant enough to maintain payments. It needs to be a part of your debt repayment plan just like your mortgage and credit card payments. With the Bahamas’ imminent Credit Bureau coming on stream, this will undoubtedly affect your credit score negatively if payments aren’t being made based upon agreed terms.
Negotiate – In the case of the Education Loan Authority, there have been initiatives since 2016 to incentivize persons to come in and make arrangements to pay off their loans. Give them a call and see how you can get that loan out of your life for good. As for financial institutions, check with your loan officer to see if any campaigns are available that may make you eligible to receive a better interest rate on your loan. Or you can ask him/her to split the current payment into two each month which will shave off interest and give you an extra payment by year-end.
Pay more than the minimum – Easier said than done, we know! But cutting back here and there, and using a budget will help you squeeze in an extra $100 or so which can go a long way each month to chopping down that loan. When making additional payments, make sure the teller places it directly to the principal and not as a credit toward next month’s payment.
Use windfalls wisely – Got a mid-year performance bonus or a monetary birthday gift from a loved one? Use the extra cash to make a lump sum payment on the loan. One-off extra payments can reduce your loan balance faster than a Bugatti.
Get cracking on paying off your student loans so you can have that euphoric feeling again just like when you strutted across the stage on graduation day.