Overcoming Student Loan Debt

Kristina Kraus
Greater Nevada Credit Union
Congratulations! You finally did it. You graduated college and can now start your career and see what excitement the future holds for you. However, if you’re like 70 percent of college graduates, a future of getting married, buying your first home or having kids may be put on hold until student loan debt is dealt with. 

With about 7 out of 10 graduates leaving school with $30,000 in debt, a rich and prosperous future can seem a lifetime away. In order to tackle and overcome your student loans, follow these tips:

Start Your Job Search Now

If you recently graduated or only have a semester or two left, start your job search now. Too many students have the mind set of wanting to have their summer off and then postpone looking for a job until after. What most recent graduates forget to factor in is that it can take 3 to 6 months, or even over a year, before they get hired on full-time somewhere. The sooner you start looking for full-time employment, the sooner you can start paying down your student debt. In fact, you can view career opportunities at Greater Nevada here.

Aim to Pay the Max, Not the Min

When you can afford to pay more on your monthly payment, do it. The faster you pay off the loan, the less you’ll pay in the long run since you won’t be paying as much in interest. Make sure that you let your lender know that you are paying extra so that you don’t just get credited on the next month’s bill and instead see the actual reduction in your principal balance.

Managing Multiple Loans

It’s common for students to acquire several student loans over the course of their education. If you think you can afford to start paying one off quickly, pick the one with the highest interest rate to tackle first. If consolidating them down to one loan with one payment is easier for you, consider shopping for a low interest rate personal loan. Just be careful not to combine federal and private loans as there can be benefits to federal loans, such as forgiveness in some situations.

Put Your Bonuses to Work

Some people receive the occasional bonus from work, family or even the IRS (i.e. your tax refund). Instead of buying a new TV or tablet, or depositing it in a checking account only to spend it soon afterwards, put the extra money toward your loans.

Be Frugal and Stick to a Budget

It’s tempting to take your first few paychecks and put them towards buying a new car, especially if you’ve been driving the same car since high school, but you’ll be happier in the end if you don’t. The last thing you want to do is take on more debt than you can handle. Instead, come up with a budget and a plan to pay off the loans.

Most importantly, don’t ignore your loans. It is better to start paying them down as soon as possible because the sooner you are living below your means, the sooner you can start saving even more.