by Harriet Bond
(San Francisco, CA, USA)
You did it! You graduated from college after four long years and you’re ready to conquer the world and make your fortune. Wait a minute! Mom and Dad have cut the purse strings, you don’t have a job and you have a student loan to repay. More than half of the graduates begin their first year out of college with a $20,000 student loan debt staring them in the face.
Find a job as quickly as possible but be particular as financially feasible. While job searching, create a record of loan liability. Dig out those old loan papers and know what you’ve agreed to.
Plan carefully. Determine how much you need to live on for everyday expenses and how much you need to pay on your loan. You may have to find a part time job until the job of your dreams comes along.
Avoid incurring more debt, specifically credit card debt. You can’t expect to live the lifestyle of your parents just yet. That will come. Curtail your expenses until the debt is paid. If you’re not married, share living expenses with someone including an apartment and car. Minimize eating out, cook at home, don’t send your clothes to the laundry, wash them yourself.
Establish a good credit rating from the beginning. If you don’t, it could follow you the rest of your life. Make your payments on time and even a higher than minimum payment if you can. If you have debts other than your student loan pay them off in a timely manner as well. Consider debt consolidation only as a last resort.
If you find yourself in a position where you can’t make a payment on time call your lender and discuss it. Let him know you’re trying and are concerned. Perhaps he could give you advice on better budgeting.
Also inform your lender if you move or change jobs. If their statements to you are returned it will not look good on your credit report. By the way, always check the statements for errors.
Be professional and honest. Borrow only what you need and be responsible for the money owed. Control expenses. Perchance, if you fall on hard times, you could arrange for a lower monthly payment or request an extended grace period.
A loan forgiveness program could be arranged with extenuating circumstances. This would forgive your loan but you would repay by volunteering at various community organizations. Serving in the military could be another option in lieu of payment.
Until you get on your feet, request that family members give you cash for birthdays or other special occasions instead of that tie or scarf you really don’t need. And, it’s a good idea not to lend money to friends, especially if you’re trying to get out of debt yourself. You may lose both your money and your friend. How you handle your student loandebt could very well lay the financial groundwork for your future. Keep saving and keep solvent.