You did it! You have finally graduated from college! With your diploma in hand and the world at your fingertips, you might feel like the possibilities are endless — and they are! But there’s one harsh reality that many people face once college is over: Student loan payments are due.
For a recent graduate, that first student loan bill can feel like a shock — as well as a regret — and can cause a lot of distress right away, especially if you haven’t immediately lined up a job after graduation.
You don’t have to let that giant piece of debt scare you. There are things you can do to make the financial burden easier, and you may even be able to receive assistance to pay it back.
Moving Back With Mom and Dad
As of 2016, 28% of recent college graduates lived with their parents. There are several factors that play into that statistic. On top of student loans, many young adults can’t afford to get a home loan. Underemployment is also a big problem, as many students can’t find a career that would make enough to offset their student loan payments and allow them to pay for standard living expenses, too.
That’s a mistake many students and parents alike make when they’re taking out loans at the beginning of a college career. When you borrow more than you anticipate making after college, it can become nearly impossible to pay off the debt on your own. While you can’t fully predict your future prospects, you should try not to borrow more than you can plan to afford. So, taking out a $50,000 for your entire college career loan means you should plan on getting into a field that can offer a job with a $50,000 salary your first year out of college. Making a budget for yourself can make paying student loan debt much more feasible, as well.
Unfortunately, if you did borrow too much and you can’t pay it off right away, you might find yourself with no other option but to move back in with mom and dad.
While parents are often sad to see their child go when they first head off to college, it’s not always easy to cohabitate again once college is over. As a graduate, you’ve had at least four years of independence and living how you want. And your parents have had that same amount of time to change their routines and establish new lives outside of parenting. So, living together once again isn’t always easy.
You can make the transition smoother for everyone by setting boundaries, making sure everyone has some “alone time,” and even creating a separate space in the basement, attic, or garage to be used for some solitude. Personal space is essential when you’re changing your living situation. Making sure everyone in the home respects that will create a much better environment.
Loan Repayment and Forgiveness Plans
Even if you didn’t plan for your loans the way you should have before and during your college career, it’s not impossible to pay them back once you’ve graduated. Some graduates are even eligible for student loan forgiveness, and you can look into if you qualify for this through the Federal Student Aid website. Loan forgiveness or cancellation usually depends on things like the type of career you choose (such as teaching), or public service. Working for some non-profit organizations can also help to lower your student loan payments or offer student loan forgiveness after a certain amount of time.
The U.S. Department of Education also offers the option of a different repayment plan or different repayment dates that you can take advantage of. As this guide notes, you may even be able to get a loan deferment if you don’t find a job immediately after college. Keep in mind that the interest keeps adding up on those loans, even when they’re deferred, but it can buy you some time to get your funds in order before you have to start making payments.
If you have taken out multiple loans, another option is to consolidate them. Consolidating student loans simply means combining them into one loan at a lower interest rate. Direct consolidation loans have fixed interest rates, so your payment will remain the same for the amount of time you have to pay it off. Be aware, though, that when it comes to the federal student loans, consolidating means losing out on some of the more flexible payback options, as well as the option to defer payments during hardships.
So, if you’re a recent college graduate, don’t let those initial student loan bills scare you. You’re certainly not alone when it comes to dealing with the massive weight that is student debt. Thankfully, there are many different ways to save money, make payments you can afford, and help to get your loan paid successfully and on time.
