I had a few thousand dollars of student debt when I graduated from college. Thankfully, due to my wife’s diligence we paid it off. For some, student debt could be an impediment to their financial freedom. Are you thinking about starting your own business but struggling with student debt? You’re not alone. According to Forbes, the average student loan debt for recent college graduates in the United States is $29,200. That’s a hefty sum, and it’s no wonder that so many young people are hesitant to take the leap into entrepreneurship. However, the good news is that there are ways to tackle your student loan debt while still building a successful business.
Let’s discuss how student debt can impact your entrepreneurial dreams, how to lower your debt, whether declaring bankruptcy is a viable option, and how to build a business while still paying off your student loans.
Student Debt Statistics
Before we get into the nitty-gritty of how to tackle student loan debt while starting a business, let’s take a quick look at some sobering statistics. According to the Federal Reserve, the total student loan debt in America is more than $1.7 trillion. This makes it the second-largest type of household debt, after only mortgage debt. Additionally, close to 17% of borrowers are behind on their payments.
How to Lower Debt
Lowering your student loan debt should be one of your top priorities if you’re thinking of starting a business. One option is to refinance your loans. Refinancing can help you secure a lower interest rate, which will save you money over time. Another option is to consider an income-driven repayment plan. These plans base your monthly payments on your income and family size, making it easier to manage your debt while trying to start a business.
Should You Declare Bankruptcy?
If you’re really struggling with student loan debt, you may be considering declaring bankruptcy. However, be aware that it’s extremely difficult to discharge student loan debt through bankruptcy. In most cases, you’ll still be responsible for paying back the full amount. Bankruptcy is not a quick fix and can be damaging to your credit score, making it more challenging to secure funding for your future business ventures.
Can You Have Student Debt and Still Have a Great Business?
Yes, absolutely! While student loan debt can be overwhelming, it’s important to remember that it doesn’t have to hold you back. There are plenty of successful entrepreneurs who have started businesses while still managing their student loan debt. With careful planning and smart financial management, you can still pursue your dreams of entrepreneurship.
Maybe Entrepreneurship is the Way to Pay Off Student Debt
Finally, consider starting a business as a way to pay off your student loan debt. There are many low-cost startup ideas that can be launched without significant investment. You could also consider freelancing or starting a consulting business related to your field of expertise. Building a successful business will take time and effort, but the extra income and flexibility could give you the financial stability you need to tackle your student loan debt.
Having student loan debt does not need to be an obstacle to starting your own business. With careful planning, smart financial management, and a little persistence, you can still pursue your entrepreneurial dreams while tackling your student loan debt. Remember, starting a business is a long-term investment in your future success, and addressing your student loan debt is an important step in securing your financial stability. Don’t let your student loan debt hold you back from achieving your dreams of entrepreneurship.