Posts Tagged ‘paying off student loans’
While you can still vividly remember your name being called and the president of your college shaking your hand as if it had just happened yesterday, the fact is, that day was nearly three months ago now! You have been a college graduate for almost 90 days. You are 90 days richer in real life experiences. You are also 90 days closer to having your first student loan bill come in the mail. That six month grace period doesn’t seem like such a long time anymore! Whether you have been planning for your student loan payments since graduation, or thinking about them now has thrown you into a complete and utter panic, check out these ways you can prepare yourself for the day you have to begin paying off those four years of wisdom.
Find Out What You Owe
If you haven’t already looked into how much money you owe, and how much your monthly payments will be, now is the time to do it. Yes, it’s scary. Yes, it’s easier to just pretend your debt doesn’t exist for as long as you possibly can, but believe it or not, taking control of the situation will feel better! You can find out what you owe in federal loans by logging onto My Fed Loan. Take a deep breath, and click on the link.
Create a Budget
Now that you know what you owe, and you lived to tell about it, it’s time to take a look at your budget. All this means is getting an idea on what you’re making and what you’re spending. You can start by making a list of all of your bills as well as how much you spend on things like rent, gas, and food. Use online banking, or your past receipts for some guidance. Once you have completed your list, add up the total amount you spend each month. Subtract it from your income. This will give you an idea on whether or not your student loan payments can currently fit into your budget.
Adjust Your Budget
If you can comfortably fit your student loans into your budget, then nice job! You can congratulate yourself on being a super financial planner. However, many will find that their student loan payment isn’t affordable given their current financial situation. In this case, you will first want to see where you can adjust your budget. What can you cut back on? What can save you money?
Adjust Your Payment Plan
Sometimes, no amount of budget adjustments could allow you to afford your student loan payments as they are. In this case, you will want to explore one of the numerous alternate payment plans at your disposal. You can research and switch your payment plans at My Fed Loan.
If your grace period is up, and you have yet to find a job that allows you to pay even the minimum amount possible on your loans, you have the option to defer for six months.
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The grace period on your student loans, usually the first six months after you’ve graduated college, can be a very strange and troubling time for many individuals. Some graduate college with a plan already in hand for their next step, whether it be traveling, graduate school, or an entry-level job. But there are plenty of others who are unsure of their next steps, and they spend their first months with their degrees figuring that out. Knowing your loan payments are about to kick in soon doesn’t help matters, and can cause great stress, especially for those who don’t have jobs. If you’re feeling a little lost as a new college grad, you may feel better grounding yourself by taking control of your debt with these three steps before it’s time to pay up!
Size up the Monster: While your natural reaction to your debt might be to pretend it doesn’t exist until your first payment, it’s better to get an idea of what you’re dealing with. When you know what you’re dealing with, you can take better control of the situation and find solutions. Determine how much money you owe, how much your monthly payments will be, and when you’ll have to start paying everything back. While this information can be scary at first, finding out during your grace period can help you to better prepare.
Take Stock of your Resources: Now that you know exactly what kind of monster you’re dealing with, you can take stock of the materials you already have that would help you take control. Do you have a job? Does your job pay enough to afford student loan payments? Does your job qualify for loan forgiveness? Are you paying to live on your own or are you living with family? Do you have extra money you could put toward loan payments? Consider your current situation in all aspects when facing the debt monster and determine how well you stand against it. Can you easily pay off your student loans by making the standard payments, or will some things have to change in the next six months?
Design a Plan of Attack: Now that you’ve figured out how much money you owe and where you stand in your ability to pay it off, it’s time to form a plan of attack! If you’ve discovered you can afford your monthly payments without an issue, your plan is to make those payments until your debt has been defeated! If you’ve discovered making payments is going to be a problem, your plan of attack will be a bit more intricate. For you to beat the debt monster, you’ll have to weaken its abilities, strengthen yours, or a combination of the two. One way you can reduce the debt monster’s power is to look into other payment plans besides the standard payment. By lowering your monthly payments to an amount you can better afford, you’re taking control of your debt monster. You can strengthen your power to pay off your loans by living cheaply for a while, weather that means living with your parents or with a couple of roommates. You can also start saving during your grace period.
Check out Cappex for more resources to help with life after college.
A recent article from WalletPop says that college debt is worse than ever right now. As college tuition drastically increases and graduates overestimate their annual incomes post-college, recent grads are left with heaps of student loan debt that they can’t just discharge in bankruptcy.
So, what are ways to avoid getting caught in this messy web of debt? For one, you can try to avoid it in the first place with these measures:
1. Scholarships Scholarships Scholarships
One of the easiest and best ways to avoid student loan debt is to find scholarships. Apply to as many scholarships as you are eligible for because you have nothing to lose. Scholarship money is good money because you don’t have to pay it back–no interest, no nothing! If you make a Cappex profile, you will be matched to all the scholarships in the database you are eligible for–start there!
2. Choose a Practical Major
If you are losing sleep at night about paying off your student loans, then maybe it’s time for a major change. Yes, that was a pun. We are strong believers that you should follow your passions in life, but if the idea of paying off your student loans is causing premature wrinkles on your forehead, you might consider a college degree that is more likely to land you a job. We did a post on college degrees to land a job earlier, and some of those degrees included:
Computer software engineering
and plenty more here.
3. 1-2 Years Community College
The 1-2 year community college trend is becoming increasingly popular as college tuition is on the rise. Community college might not be your dream school, but spending a few semesters taking care of prerequisites at a community college can save you tons of money on tuition. Just make sure to double check that there’s an articulation agreement with the 4-year university you plan on eventually attending.
One example is the articulation agreement that the Illinois Institute of Technology (IIT) has with Oakton Community College. Students who take their first two years of college at Oakton and earn Associate of Arts and Science degrees are guaranteed admission to IIT. Students who want to take advantage of this program need to apply for it before they start their freshman year and meet minimum academic standards. The program saves students $40,000 over two years.
You can read more about how a year or more of community college can help you save on college here (go to page 19).
Do you have any tips on avoiding college debt? Comment and let us know!
Tags: avoiding student loan debt, Cappex, college, college debt, college tuition, community college, find college scholarships, find scholarships, great college majors, how to pay for college, paying college tuition, paying off student loans, Scholarships and Financial Aid, student loan debt, student loans
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