We asked a recent college graduate how she’s living with her student loans. Check out what she had to say:
You're Out of School Now. How Are You Doing With Your Loan Payments?
“Just add it to my tab” are six words I wish I’d said less often when deciding to take out another student loan!
It wasn’t like I was totally irresponsible, I just didn’t think adding to my debt made much difference—because it didn’t seem like getting out of debt was ever…like, even possible.
And if I am being completely honest, my grasp on the reality of student loans was non-existent. Like, if I just ignored my loans, they’d go away.
Ha! So, How Did You Prepare For Paying Them Back?
Well … like I said, I didn’t. But once the payments started, I had to change my way of thinking … and fast. Today I’m totally in charge of my debt as I pay back my student loans.
If You Could Share Your Top Five Strategies for Students Like You, Who Are Looking at Repaying Their Loans, What Would They Be?
A. First and foremost … understand your debt!
I mean, do you really understand how long it will take to pay them off? You should. Create a spreadsheet of your loans (ya, math’s not over, folks) to see what you’re really up against. There’s an app for that, too, of course, called “Debt Free” that I use. It helps me track where I’m at and shows me how much longer I have until I’m debt free. I know there are apps like this for both iPhone and Android. Good tools.
Next, you gotta live like a college student … sorry.
Even six years out of school I’m not buying a house or car, or taking big trips. I still live like a college student: renting an affordable apartment, using hand-me-down furniture, driving a used car, and taking bargain trips. Sure, I still do some of my favorite things like go to concerts and sporting events, but I may not do them as lavishly as I would like to. (Shout-out from the nose bleeds!)
Three. Hang out with cheap friends.
This really helps me save. A lot of my friends that don’t have student loan debt don’t get it, but many others can completely relate—and I love them just the same. Almost every time I make a suggestion that’s free or cheap–they’re in.
My number four: Plan ahead.
There’s nothing worse than having to choose between a loan payment and a car repair. Plan ahead for the unexpected to help prevent the walk of shame over to your parents asking to borrow money. Or, even worse–racking up credit card debt. Each month, put aside a few bucks in an emergency savings fund. Even if it’s a small amount, it’ll help!
And finally, 5. This may sound weird, but protect your parents from your debt.
Knowing what I know now, I can’t believe that my parents would even cosign a loan without having a life insurance policy on me. So, I took a life insurance policy out on myself to protect my parents from my debt. I can sleep soundly knowing that if something happened to me, I wouldn’t leave debt for them to pay.
P.S. Although it isn’t common with Private Student Loans, some lenders do offer a death benefit. In other words, they don’t hold parents responsible for their students’ loan repayments, in the unlikely event that they die. I didn’t know this at the time I took out my loans.
And finally, 6. Celebrate small victories
Oh, wait. I have a 7th. Celebrate small victories!
After all, every dollar is one dollar closer to being debt free. Set a realistic goal for the year and then reward yourself (sensibly) when you hit it!
Created and compiled by Rachel Rue, cuLearn