Some ideas for reducing your student loan debt and repayments:

1.Consolidate your student loans into one loan that spreads the payments over a longer period of time. Sometimes this enables you to receive a better interest rate on the consolidated loan.

2.Work out a plan with lenders to extend payments.

3.Work with a lender to pay less now and more later as your income grows.

4.Work with a lender to defer payments until your financial circumstances become better. If you are expecting a better job with more money then perhaps they may be willing to work with you.

5.Get a higher paying job or work extra hours for your employer to get the debt paid off.

With any of these ideas make sure that you read the paperwork completely. If you don’t understand ask questions. Check with your financial advisors, or parents or whomever you trust. You don’t want to make things worse by getting into a loan that doesn’t work out for you.

Excerpt from the article:

The effort, he says, was inspired after reading “Nickel and Dimed,” in which author Barbara Ehrenreich takes on a series of low-paying jobs. Unlike Ms. Ehrenreich, who chronicled the difficulty of advancing beyond the ranks of the working poor, Shepard found he was able to successfully climb out of his self-imposed poverty.

Excerpt from the Article:

Alone on a dark gritty street, Adam Shepard searched for a homeless shelter. He had a gym bag, $25, and little else. A former college athlete with a bachelor’s degree, Mr. Shepard had left a comfortable life with supportive parents in Raleigh, N.C. Now he was an outsider on the wrong side of the tracks in Charles­ton, S.C.

But Shepard’s descent into poverty in the summer of 2006 was no accident. Shortly after graduating from Merrimack College in North Andover, Mass., he intentionally left his parents’ home to test the vivacity of the American Dream. His goal: to have a furnished apartment, a car, and $2,500 in savings within a year.

To make his quest even more challenging, he decided not to use any of his previous contacts or mention his education.

During his first 70 days in Charleston, Shepard lived in a shelter and received food stamps. He also made new friends, finding work as a day laborer, which led to a steady job with a moving company.

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Adam Shephard did have a credit care in his back pocket in case of emergencies which most if not all homeless people don’t have. This is a good example of what can be done to overcome adversity. What do you think?

1. Payoff your smallest debt first and apply the money from the first loan to the 2nd loan and then the 1st and 2nd loan money to the 3rd loan and so on… This creates a snowball effect which will psychologically eliminate debt and make you feel better about getting rid of debt faster.

2. Payoff the debt with the highest interest rate first thereby saving yourself the most money. Economically this would make the most sense. Unfortunately people have a hard time sticking go a plan when it seems harder. This will save you the most money (interest) over the long run.

Either one of these plans will get you out of debt eventually. It just takes the willpower to stick with either plan.

What do you think about these plans? Please comment.

NEW YORK (CNNMoney.com) The Federal Reserve cut a key short-term interest rate by a half-percentage point Wednesday, its second significant cut in just over a week, as the central bank tries to combat the growing risk of a U.S. recession.

U.S. stocks, which had been slightly lower ahead of the announcement, surged on news of the rate cut.

The federal funds rate, an overnight bank lending rate that affects how much interest consumers pay on credit cards, home equity lines of credit and auto loans, was cut to 3.0% from 3.5%. The rate had stood at 5.25% only four months ago.

The discount rate, which is what banks pay to borrow directly from the Fed, was also cut by a half-percentage point to 3.5% on Wednesday. The cut was made at the request of nine of the 12 Federal Reserve district bank presidents from around the country.

The Fed cut both rates by three-quarters of a percentage point in an emergency move on Jan. 22.

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This is an excellent book that provides you with a no nonsense comprehensive plan to get yourself out of debt and to increase your wealth. You just need to learn how to say NO.

Book	Audio

Here are some of his key points:

1. Debt is bad. Don’t get into it. Buy with cash.
2. Here’s how to payoff debt: Concentrate on the smallest debt first. Pay what you can on it, over the minimum payment. Once the smallest debt is gone, add that former payment to the next outstanding debt payment and so on. (The “debt snowball”) is what he calls it. Psychologically this will help you get your debt paid off. He says don’t concentrate on the interest rate, just the size of the loan.
3. After all debts are gone, set aside 3-6 months of expenses for your emergency fund.
4. After the emergency fund, start investing in mutual funds.