On Handling Student Loan Debt (For New Graduates)

By Julia Dunn on March 29, 2017

Graduating soon? Unless your college was somehow fully funded by grants and scholarships (in rare cases, family), you probably took out a few student loans to get through college. Once you graduate, you’ll be confronted with the debt waiting to be paid off.

Student debt is a crisis in the country and the severity of this debt truly weighs students down. However, ignoring it is not the best way to deal with it. Here are some tips for new graduates on how to handle debt.

Learn about your loans

The best way to stop being overwhelmed by student debt? Get informed about exactly how your loans work. Stop pushing to the side those unopened loan-related pieces of mail you’ve been receiving, and attempt to make sense of what the documents are saying. If you’re confused, talk to someone close to you who may be more knowledgeable about loans, or ask your lender (the person who “[works] with borrowers to resolve problems”).

It’s also important to remember that not all loans have the same grace periods (amounts of time you can wait after graduation before making your very first loan payment), so figure out how long you can defer payments and when you’ll need to start paying.

The grace period is “six months for federal Stafford loans (sometimes called Subsidized and Unsubsidized loans), but nine months for federal Perkins loans. For federal PLUS loans, you probably have access to a six-month deferment … The grace periods for private student loans vary.”

This is one of the biggest pieces of information to clarify for yourself if you’ve got more than one loan.

Smart tip (from the Institute for College Access and Success): “If you can afford to pay more than your required monthly payment — every time or now and then — you can lower the amount of interest you have to pay over the life of the loan.”

This is a great way to lessen the burden of student loans and get ahead. The more you are able to pay earlier, the better shape you’ll be in.

Continue living frugally

As articulated by financial coach Whitney Hansen in an article by StudentLoanHero.com, “keep living like a student” even after you graduate. Resist the urge to buy a lot after graduation, even if you find employment. It’ll only help you to trick yourself into thinking you have less money than you have because any extra money can go towards getting a head start on loan payments.

The earlier you get in the habit of making loan payments, the more easily you may be able to make it a habit of paying just a little each month. Then, you’ll be used to chipping away at your debt. Going wild paying for post-grad outfits and other seemingly necessary expenses might only hurt you later on when the debt creeps back up to you.

Image via Pixabay.com

Look for jobs that can help you pay

More and more fields offer employment positions in which one of the benefits is some type of “loan forgiveness” feature. This means, your new job could be paying off your student loans — a two for one! Even if the job isn’t as desirable as another, consider this perk as a large incentive to take the job. You may not realize it right away, but jobs with loan forgiveness features are extremely helpful and you’ll be lucky to get one of these.

According to TheSimpleDollar.com, “many of the careers that come with the heftiest of student loan debt, such as medical professions, lawyers, and veterinarians, also come with an opportunity to get loans canceled by working certain jobs. But there are also opportunities in law enforcement, education, speech pathology, social work, and therapy, and for anyone working in a qualified nonprofit.”

Practice loan self-care

You’re taking care of your loans, but are you taking care of yourself still? Set goals for yourself (such as “by the end of July, I want to have paid off X percent of this loan”). Once you achieve your goal, congratulate yourself! It’s no fun having to pay off loans, so any milestone is noteworthy no matter how small.  Along similar lines, do not instantly regret having attended college just because you have some debt. Even if you don’t see the rewards right away, know that your investments in yourself will be worth it.

All of this advice aside, students may still feel scared about their debt, and they have a right to feel so. However, there are plenty of resources available to students to help them feel more in control of their student loan debt, and most worries can be neutralized by simply speaking with an adviser at your university’s financial aid office or with someone who’s been making payments for a while already.

As is true when resolving most problems, being honest about what you don’t understand and what you need help with is the best way to feel secure and prepared to fend off pesky student loans.

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