While many people are struggling to pay off their student loans, that is no reason to let it stay there for a long time. A Student loan is one of the greatest burdens of the young working population. In the US alone student loans total over $1.5 trillion. This huge financial burden is crippling the brightest people entering the workforce. Toi Banks is one woman who wanted to fight off that shackle straight away. Her story should be a lesson to all.
Toi Banks finished university owing $26,000 in debt. While her loan was only $20,000 the interest had already started to accrue by the time she left. Toi Banks comes from a lower-income family and says that every member of her family had never successfully paid off student loans to date. The problem is that when you leave university and start your first job there are already so many expenses to cater to that sometimes you can only afford to pay off the interest on your loan, not the bulk amount.
That is what happened to Toi Banks. When she graduated she moved to her family home for 6 months. As she wasn’t paying for rent she was able to bring down her student loan a little bit, then she found a good job. She moved to New York and got an apartment. Suddenly she found that although she continued repayments on her loan, she was only able to pay the minimum. After a year when she looked at her student loan, it was still the same size. Enough was enough.
Banks decided to move to a smaller apartment, forgo any savings for a period and focus all of her spare money on her loans. For a while, 50% of her paycheck went to her loans. Finally, after five years she successfully managed to repay her loans. To be free to make decisions on your future you need to address your student loan first.