Starting Life with Student Loan Debt

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Your special day has arrived… after all of your hard work you have finally become a college graduate and it’s time to celebrate! But with the high of completion comes the realization that your student loans must now be repaid.  Don’t panic yet.  There are steps you can take to pay them back without much stress, but it does take some planning, so sit down with your pad and pen and get ready to build your repayment strategy.

Build your student loan repayment plan

This first step is going to depend on whether you are currently employed or just looking for employment in your new area of expertise.  Most financiers of student loans, whether private or government guaranteed, will allow six months for a “grace period” before you have to start making payments.  This gives you plenty of time to put your plan in place.  First of all, if you are already gainfully employed, start paying the interest charges on your loans.  Not many students realize that those interest charges are compounded as time goes on, meaning you end up paying interest on your interest.

If you are not employed, the first step is going to be your job hunting strategy.  A lot of potential employers now have their entire application process online so this step will not be difficult.  Simply put in at least one application per day for the jobs that are available, even if they are jobs that are below your skill level.  For example, you should be willing to “flip burgers” as well as work within your newly completed education.  Be sure you have your updated resume and references handy for those job interviews.  You should have a resume for each area of work that you are pursuing, targeting your skills in that area of expertise.  In addition, each cover letter should be customized for the employer  you are sending it to.

Matt’s note: Don’t forget to think outside the box and create your own entrepreneurial work that matches your mission in life and helps others.

After taking notes on getting your employment write down exactly what you owe, what you earn, and what your expenses are.  You will have to find a balance between the three, so that you have a repayment plan that is realistic.  First of all, buying a pair of $400 shoes is not a necessary expense, so just don’t do it.  There are better options that look just as good.  The main idea is that you have to keep your spending under control.  Don’t buy what you don’t need.  Weigh your wants versus your needs, and use that extra money to make a payment toward your student loans.  Write down your budget for each month, and stick to it.

Talk to your student loan financiers

If things get difficult in your loan repayment, be sure to talk to the financiers of your student loans; most offer several repayment schedules to accommodate for people with low income jobs or unemployment. Although this delays the final repayment of the loans, it will save your credit score.

If you have no problem in making your student loan payments, ask the financier if there is a penalty for early repayment, and if there is none, consider sending double payments each month.  Not only will this save the expense of interest on the loans, but will allow repayment in half the time.  The second payment you make normally will not have finance charges, so all of it will be applied to the principle on the loan.

Matt’s note: Only do this if you have eliminated other higher interest debts.

If you find it necessary to apply for a deferment or forbearance on your student loans, at minimum try to keep up on the interest payments.  The finance company will see that you are making an effort to repay your loans and will be more willing to work with you if difficult times ensue.  Another benefit to this is that you’ll be eliminating a future expense.

Even if you are unable to pay, make sure you stay in contact in your student loan financier.  Most companies are willing to find alternative ways for repayment, even if it is delayed due to emergency expenses or unemployment.  They are well aware of the economic climate and would rather have a delayed repayment than none at all.

Be honest in all you do

Some people miss student loan payments – to fund other unnecessary purchases like vacations or clothing – then tell their lender they have a hardship.  Don’t do that.  First of all it’s irresponsible spending, and worse yet, it’s a lie. Lies tend to bite back so steer clear.

Be honest with your lender as well as to yourself – pay your student loans instead of visiting the Bahamas or getting that next great pair of shoes.  In the long run you’ll be glad you did!


Miles Williams is a creative writer, marketer, and salesman living in Northern Michigan whose passions are finance and real estate. He writes at Real Estate Marketing Stop helping real estate agents make the most out of the social movement. Miles’s small web company specializes in writing reports, articles, and ebooks for clients.

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1 Emily

I understand that in certain, occasional situations, some student loan debt may make life considerably easier, but your best bet is to do what you can to avoid taking out loans altogether.

Including, thinking long and hard about whether you really need to go to college.

2 Matt Jabs

Amen Emily, many people do just fine skipping college in lieu of self-education at the local library combined with a passion and drive in entrepreneurship.

3 Crystal @ Master Your Card

I ended up with $8000 of loans from my parents that they ended up “gifting” me a few months after I graduated. I kept the loans that low through part-time jobs and scholarships. Best decision ever other than marrying my husband.

4 Matt Jabs

Way to go Crystal, I wish I would have been as smart as you back in my college days! I’m paying for it now, but better late than never.

5 Kelsey @ Zero to One Million Challenge

In restrospect, one of the worst things that I did regarding my student loans was not to start paying small amounts while I was still in school. It’s a bit too late for the recent graduates who are reading this article, but if you’re still a college student, and have the means to make even $10 payments to your loans, do it. The interest accrues faster than you could imagine, and your future self will thank you profusely.

6 Matt Jabs

Kelsey is a genius… listen to her! Pay early and often.

7 sophie

I’m still in college 4th year, I would like to start paying back my loans now but am on a VERY tight budget. A budget where you can barely afford food. The beginning of the semesters choices are food or textbooks? Textbooks win.

8 Matt Jabs

During college, for about a year or more, I lived on spaghetti and tuna fish – like the noodles, the sauce, and a cheap can of tuna. Sounds gross but it worked and it was better than Ramen Noodles!

9 Miles

I will be writing a followup article about how I am paying down $1,000 per month until I am out of student loan debt! Stay tuned for that.

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