Graduating students who have taken out student loans are in for a bit of surprise soon after graduation. Once you receive your first student loan bill, you may be taken aback, especially after you see how much you owe to the government.
The average amount of student loan debt is in the $30,000 range and many students are not excited about paying it back. Whether or not you have a good job and have moved into your career, you still have to make payments toward your debt.
Below, we will go over some tips to help you avoid as much debt as possible when you graduate.
1. Always Know and Have Information about Your Loans
It is important that you always know about your loans. If you make the mistake of not knowing anything about them, then you will find that you have trouble remembering when the due date is, how much it is, and so on.
If you find that you do not know the information off hand, call your loan servicer and ask for all of the details. They can even send you a statement to let you know how much your balance is and more. For reference, FedLoan is one of the nation’s largest student loan servicing companies and you can find their contact information here.
2. Consider Forgiveness Programs
You should consider some of the loan forgiveness programs that are available. For instance, the public service loan forgiveness program is designed to forgive the loans of graduated students who work in a qualifying field and have met all requirements set forth.
Once your loan is forgiven, you no longer have to worry about making loan payments and you will be free and clear from debt. Most loan forgiveness programs require a certain number of payments before the forgiveness will kick in.
3. Consolidate Your Loans
If you have a lot of outstanding loans, you may want to consider consolidating them all into one loan. When you do consolidate, you enjoy the benefits of having just a single loan and not multiples in your name. In addition, you will no longer have to make multiple payments per month and just one.
4. Make a Budget
When the time approaches, you need to make a budget for yourself and stick to it. Students who do not have a budget find it harder to afford their bills, especially since they may not set the money aside for them.
When you start to think about your budget, always subtract your utility payments first, then your student loan payments, then your necessities and extras. You will find that making a budget keeps your stress level in check and you are able to relax more each month knowing how much money you have and where it needs to go.
5. Stop Overspending on Unnecessary Things
It is essential that you stop spending your money on unnecessary things and cut them from your budget. For example, if you purchase a coffee from Starbucks each and every day and it costs you $4, then you are spending an additional $120 on coffee each month. Consider purchasing coffee at the store and brewing it for yourself or cut the coffee out altogether. This $120 could be used directly toward your student loan payment and you will enjoy knowing that your debt amount is dwindling quickly.
No student wants to graduate from college and then live paycheck to paycheck while making their student loan payments. Not only does it stink, it can put undue stress on you. Before you graduate, you need to sit down and start thinking of strategies and ways to pay your student loans without feeling broke.
One of the most important things to keep in mind is that there are options available to help you repay your student loans, so you are not just stuck. You should contact your loan provider if you are having trouble paying. You may be eligible for payment plans that are based on your income, deferments, and more.
The best piece of advice that you can receive is to never ignore your student loans because they do not go away. In fact, ignoring them and not paying them only makes the entire situation ten times worse than it needs to be.