Dear Chuck,

It’s back to school time for many families, but my children are finishing college and newly graduated, so I’m less concerned now that they have a diploma– and more worried about the debt they accumulated – the nasty student loan kind of debt.. Do you have any advice for my family and me?

Parents of Indebted Graduate

Dear Parents,

This is a subject that hits close to home since my wife and I have four boys.

It is difficult, given the explosive cost of a college education these days, to graduate without any loans. Over the last 35 years, the cost of a public college education has nearly quadrupled, far exceeding inflation, as many parents know.

With a lot of intensive effort, my wife and I have been able to help our two oldest sons complete their college education without loans and our third son just started college this fall with a plan to never have any student-related debt.

I will have a few tips about that in a minute, but first let me reassure you that there are strategies for ridding yourself of college debt quickly and even avoiding it altogether as we have been able to do.

Most students take on debt with the hope that a college education provides better employment opportunities and assume the loan can easily be repaid.  I’m sad to report that the average student loan debt today is over $37,000! And many graduates start off their careers with limited job prospects, thus finding themselves with a great deal of financial stress.  If debt is absolutely necessary for their education, then making a plan to deal with the debt should begin by investigating lenders before signing the loan papers.

1. Know the terms.

Before you take on the debt, be sure to understand what your future payment will be, how you will pay and to whom, and when those payments will begin. Typically, a student has a six-month grace period in which to get a job and arrange finances so that once the loan payments kick in they are in a position to make those payments. Some graduates wait to be contacted before they begin paying, but that is a mistake. The repayment terms of the loan cannot be discharged or adjusted by a failure to understand that you should have sent in some money. You just graduated from college; you can’t claim ignorance as an excuse! It’s your responsibility to know how and when to begin making payments. Don’t assume they will call you.

2. Prepare to pay.

Student debt has been designed to stick with you and can rarely be resolved in bankruptcy. In fact, Debt.org reports: “Defaulting on federal student loans will result in more severe penalties. The government can garnish up to 15 percent of your wages and Social Security benefits, as well as offset income tax refunds. The government may also deduct 25 percent of each payment for collection fees, making the loan cost significantly more.” As a newly graduated professional, probably without a mortgage or a family, prioritizing paying this debt back quickly is a good first move. Keeping living costs low, such as getting a roommate or even spending time in your parents’ basement, can be effective IF you are putting the money saved toward reducing the debt. I strongly recommend beginning your career with a focus on paying off the loan as quickly as possible. Think “low living costs plus increased repayment of debt equals quicker route to freedom”.

A good strategy for getting rid of student debt quickly is to arrange to make extra payments on the principle (the money you borrowed). Writing at Forbes, Andrew Josuweit described how that might work:

“Let’s say you owe the average debt load of $37,000 and your fixed interest rate sits at 7% APR. Using a student loan calculator, you see that you would need to fork over $429 for 120 consecutive months if you opted for the 10-year Standard Repayment Plan. And over this 10-year timeline, you would end up paying $51,480 on your loans when interest is factored in. Now imagine that you boosted your monthly payment by $100 to $529 per month. By doing this from the get-go, you’ll shorten your repayment timeline to 91 months, or 7.6 years! Plus, you’ll save a whopping $3,871 in interest payments alone.”

However, one note of caution – before you send in extra payments, be sure to talk with the lender so that your money is applied directly to the principle. If you don’t let your lender know where to apply that extra money, they will decide for you.

3. Build a Budget

Debt is only part of a financial life. An important part of the process of creating a strong fiscal foundation and getting rid of debt is building a functional budget. So that from day one after college, you can see where your money is going, and know how much you can apply to your loans. Check out this free budget calculator to see how your expenses match up. At Crown, we also have a number of free debt calculators, so that you can understand how arranging to make extra payments on any debt can free you so much sooner than you might imagine. But be mindful that this can take time. In counseling people over the years, I’ve found that it can take 5 to 7 years for people to be completely free from all debt, once they set their minds on that goal.

For those whose children have not yet entered college, we’ve created a Guide to a Debt-Free Degree on ways to graduate with minimal debt. You can cut costs by taking classes in high school that count for college credit or by living at home for two years and attending community college before going to the school you want to graduate from, or by considering programs that will pay for your college, such as those offered by the military.

Our third son is enrolled in community college and with scholarships and grants; his first two years of tuition are almost completely covered. He is also working, which reduces costs and, contrary to popular opinion, actually improves his classroom performance.

There is no one-size-fits-all answer to paying for college, just like there is not one answer to the question of where you should go to school or what you should study.

I applaud your desire to see your graduates become free from this debt. So many people become trapped in work they do not enjoy because of financial responsibilities. People who might want to go to the mission field or teach underprivileged children don’t have that option because debt creates a burden they must address. The best reason to get rid of debt, or avoid it altogether is to be free to do any work God might ask of us. His word cautions us to avoid becoming a slave to the lender.

Originally posted at Christian Post September 2, 2016.