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Dealing with Student Loan Debt in Your 20s

24 July 2012 14 Comments

College graduates today are faced with many challenges —towering student debt, a competitive job market, a failing economy, and many other “real world” things that newbie grads have been taking on for years and years. Of course, money is always a huge concern for 20-somethings just gaining their footing in the world of financial responsibility. This is the way it goes—the years after college, increasingly becoming known as our years as “20-somethings”, are difficult because of their uncertainty and instability. There are few things more daunting to newly graduated young adults entering the world post-graduation than doing so with seemingly immeasurable student debt. Numerous graduates whether they are just out of undergrad, a doctorate program, or a specialized degree program like the MBA (master of business administration) or MFA (master of fine arts), are being put in extremely difficult positions. With student debt rates higher than they’ve ever been in history, it can be very easy to feel in completely over your head. Use these tips to create a successful student debt repayment action plan and successfully gain your footing as a financially responsible 20-something adult.

Create Reasonable Goals

Gaining control of your student debt and finances as a recent grad can boil down to setting goals and creating a careful plan of action. Look at your student loan payments and come up with goals for your repayment. Think about things with both a short term and long term mindset. Take some time to sit down and really look through your student loan debt. It is advised that you try to make the suggested monthly payments plus a few dollars extra whenever possible—of course, paying more than this is always a plus. Staying at the absolute minimum is fine obviously, but it is not ideal. Look carefully at your personal finances and try to decide where you can find extra finances for your loan payments. Budgeting is a great way to stay on top of your money, spending, and saving. In the long term, the general repayment period for paying off a student loan is 10 years. This is a good place to start for your long term payment goals. Try to find ways to reduce that 10 year mark wherever you can.

Research Your Loan Terms

While goals are certainly essential for gaining a careful grip on your loan payments, they aren’t going to get you very far if you don’t really understand your loan terms. Take some time to sit down and do some research. Read through the terms of your loan and figure out when payments are due. Pay close attention to when your loan’s “grace period” is up and other specific terms of payment you need to know. Most lenders give graduates a grace period after they graduate where no payments are due immediately. However, that grace period can vary. Be sure to study and research your own loan or loans that you have taken out for school expenses, but also look into loan repayment information in general. There are a lot of useful tools and resources available to help people deal with debt in a better and smarter way.

Loan Extensions and Consolidating

Many lenders will allow graduates to lower their monthly student loan payments from the start of their payment process. This can be extremely enticing for a new grad out of work or overwhelmed by loan payments. However, it may not be the best option all the time. Be sure to do your research. By consolidating your loan or extending your loan repayment you can gain some immediate relief, but suffer for it in the long run. By extending your repayment period you will be making more payments overall and be paying more in interest typically. Of course, there are times when loan extensions and consolidation might be needed—this happens from time to time especially in today’s economy. However, if it can be avoided, most would suggest trying to make at least the minimum payment monthly as long as you can.

An experienced writer on all things related to higher education and business, Amanda Watson spends her days covering the latest stories on various topics such as online mba rankings, college finances, web entrepreneurship, and social media marketing. You can contact Amanda at watsonamanda.48@gmail.com.


  • Loans Perth said:

    "think about things with both a short term and long term mindset. " – will definitely keep that in mind.

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  • FunLosAngelesTours said:

    Taking a student loan is a rather risky thing to do, especially nowadays. How sure can you be that you will get a satisfactory job after graduation? This is what you should in fact consider. If you know that your education will net you a nice job then by all means go for it. But there are many university courses that are not popular on the job market right now and in this case you should really reconsider your plans

  • John said:

    As we face student loan debt, it's understandable that there are a lot of apprehensions along the way. The best piece of advice that I can give anyone is that you should only spend what you need, not what you want. If you can condition yourself to live with the bare essentials, you'll be just fine. If you feel that you're sent in a deadly spiral of spending, analyze your expenses and cut out what you don't need. It's amazing to see how much money you can actually save over time! You'll be impressed with yourself, and you can breath a lot easier.

  • Rick said:

    Very insightful. Thanks.

  • Veronica Milano said:

    Unfortunately there are fery few scholarships and a lot of people who don't afford to pay a student loan.If you want to study in orther to take a higher degree you have to invest a lot of money and sometimes we face dificult situations such as debts.But the value of these debts depends on our way of managing the situation.It is very important to establish the priorities and to forget about luxury in order to be able to pay our debts.I've recently attended a course where someone explained
    what is public administration and I realized that it is a strong relationship between this and our budget management.

  • Lorantz Rems said:

    Being a student is not an easy target as you need to invest a lot of money in books and studying materials in order to get your degree.I've recently taken a MPA and MS degree and I am aware how much money a student needs.It is very important to know how to deal with money and to avoid spending on useless things and activities in order to pay your debts.

  • Horatio Alleil said:

    Dealing with a students debt is an unpleasant situation but it depends on how big is the debt and how you deal with your budget in order to afford to pay the debt.I've recently subscribed to a leadership development program and I had to borrow some money in order to afford paying the student loan.Now I am focusing in giving back that money and I've given up to useless things such as going out with friends every night.

  • Charter Caribbean said:

    Despite all the disadvantages, I believe that it is a good alternative for the students.

  • Randall said:

    The "Study Now Pay Later" program had crumbled due to low employment rates. According to a loan modification attorney, these student loans are not flexible enough to avert disaster.

  • Sandra Simpson said:

    Dealing with student loan debt is not an easy task.I've recently taken a bachelors degree in culinary arts and it was very difficult for me to afford paying the student loan without borrowing money.I don't like to have debts and this is why I chose to work in vacations in order to pay school taxes.

  • Tom Tom Diner said:

    The level of expense for college is reaching a tipping point. It's unsustainable. Sure the 1%'ers will continue to send their kids to college. But who amongst the 99 want's to be sacked with 30K or more of debt while asking the person in line if they "want fries with that"? I'd rather be debt free and working a service job and going to school part time than facing a balloon of payments with high interest upon graduation.

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