6 Ways to Start Managing Student Loans & Debt
Just about anyone who has ever taken out a student loan will tell you that you that it is not something to be taken lightly. At the end of March 2015 the total student loan balances came out to $1.27 trillion, according to the Federal Reserve Board’s Consumer Credit and while that number may seem high, it is projected to get even larger in the coming years.
Staying on top of these loans may not be the most exciting thing to keep track off, but it is completely necessary. If you are a college student or a recent graduate who has taken out a student loan, now is not the time to be fiscally irresponsible. The following tips will provide different ways to help you effectively manage (or start managing) your student loans and debt.
Make an appointment with your college’s financial aid department.
Your college’s financial aid department is there for you, so let them help you. They can help you find your loans and educate you about the different types of payment options for your loans.
Get to know your loans.
Generally, people take out a variety of loans to cover different costs, so figure out which ones have the most interest per month and start there. Some loans can qualify for other things such as deferment, loan forgiveness and pay-as-you-earn, so consider these options before you make a plan. Also, find out what the minimum payments will be for each loan per month, record the information and keep it in a safe place so you can refer to it as often as you need.
Make a budget and stick to it.
To make a budget is to make a plan, so dedicate a little time and develop a realistic monthly payment that will get you out of debt before your grandchildren graduate high school. Collection agencies will often grant grace periods for students after they graduate to give them time to find jobs. While this may seem like a time to defer the payments, this is actually the best time to develop a plan and put it into action. The payments are going to have to be paid anyways, so don’t procrastinate and start developing a payment routine.
Make more money.
Although it may not be ideal to begin working 40 – 50 hours per week after graduating from college, picking up additional work can prevent you from spending money and can create realistic ways to pay off student loans.
There are some organizations such as AmeriCorps, VISTA (Volunteers In Service To America), Peace Corps, Teach for America, and National Health Service Corps that offer types of loan forgiveness programs based on your service.
Move (if you have to).
There may be other places out there with a lower cost of living, so maybe it’s time to make some new friends. Places like Kansas; Detroit, Michigan; Niagara Falls, New York; and Saskatchewan, Canada are places that offer types of reimbursement options. However, these options usually have strings attached, like living in specific communities or working for a specific company.
Recent graduates are often times excited about the amount of free time they are exposed to after getting out of school, but that freedom shrinks in glamour as soon as collecting agencies start sending student loan bills. So create a plan, understand your loans, get into a payment routine and start managing your debt. It may not seem like the most compelling way to spend your hard earned money, but it will ultimately prevent stress and anxiety down the road.