With graduation now in the rear-view mirror, many college graduates are applying for and starting jobs to continue their career paths. However, in embarking on the next steps in their journey — whether additional years of higher education or joining the workforce — graduates are discouraged due to unpaid student loans. Ultimately, having student loan debt shouldn’t take away the milestones you achieved, as graduating and entering a new job is exciting. So, if you are a recent or upcoming graduate entering the workforce with debt to pay off, here are some ways to alleviate your student loan debt.
According to the Department of Education, as of July 2023, the average recent graduate student loan debt is $37,337. Student loans make up the second highest form of debt, according to the 2022 Federal Reserve Bank of New York’s Household Debt and Credit report — surpassing all other types of debt except housing.
Many post-graduates also have to navigate getting a decent job to help pay off their loans while having other financial responsibilities. According to Indeed, the average entry-level salary is $40,153, with the range going as low as $26,000 to as high as $56,000. Nonetheless, with inflation increasing and many entry-level salaries remaining the same, it can be discouraging when you have an additional responsibility to pay off student loans.
Despite the numerous barriers college graduates face, SCOTUS also denied President Biden’s Student Loan Forgiveness Program on June 30, causing an additional delay for graduates with debt to achieve financial freedom. Many students who take out loans also come from low-income communities, oftentimes going days wondering when their next meal will be.
As a recent graduate, having to navigate the real world on top of having to pay off loans can be confusing and stressful. Paying back student loans as a recent graduate may not be pleasant, as many entry positions do not offer large incomes, but there are ways to alleviate the numerous challenges of paying back debt.
- Apply For Jobs That Assist In Paying Off Student Loans.
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Numerous companies, including Google and Estée Lauder, offer student loan repayment assistance programs to their employees. Additionally, the federal government offers employers with student loan debt of at least $5,000 the opportunity to enroll in the Federal Student Loan Repayment Program. Within this program, workers who have been employed by the government for at least three years are eligible to receive a maximum of $10,000 to assist in paying off their loans for up to three years. The U.S. government currently has numerous job opportunities for recent graduates to take advantage of.
- Make a plan to pay off the loans.
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In addition to asking for assistance, outlining a plan to pay off your student loans is just as important. To make things easier, you can download a money-managing app, like Mint to track your daily spending and recurring payments. Having a money-managing app can also help you detect ways to decrease spending on unnecessary purchases. Ultimately, using these apps as a way to plan to pay off your student loans can help you develop smarter financial strategies.
In making a plan, it’s also important to set a safe budget. A common struggle for recent graduates is creating unrealistic plans to eliminate the debt. In doing this, you also forget to put aside money for emergencies and personal needs. Although paying off your loans as fast as possible is crucial, it is also important to make sure you are planning for worst-case scenarios and advocating for your mental health. Having student loan debt should not entirely dictate how you live your life. It’s OK to treat yourself every once in a while.
- Enroll In A Student Loan Repayment Plan.
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Not everyone is a financial planner, and that’s OK. Consider enrolling in a student loan repayment plan. The Federal Student Aid Loan Simulator calculates student loan payments and offers student loan plans based on your current needs and goals. However, it’s important to keep in mind that the Loan Simulator is meant to be used for informational purposes and should not be used as a form of financial advice. Nonetheless, whether you want to find the best student loan repayment strategy for you, or you’re struggling in paying off your student loan payments, it can’t hurt to check it out.
- Consider consolidating Your Loans.
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Student loan consolidation is a way of combining all your federal student loans into one bigger loan. Consolidating your loans provides many benefits, such as lower monthly payments, more repayment options, simplified payments, and the flexibility to change your loan servicer. Another benefit of consolidating your loans is that it’s free to apply to see if you’re eligible. In consolidating your loan, you may have more flexibility in saving money for rent, emergencies, and personal use.
Paying off student loan debt as a recent graduate can be overwhelming. However, it shouldn’t hinder you from enjoying post-graduate life. Learn how to navigate paying off your loans promptly to avoid additional negative financial consequences. By speaking with your employer about student loans and making a financial plan to pay off the loans, you’ll be a step closer to gaining financial freedom. In saving money during your entry job while paying off loans, it can aid in having good lifelong financial health.
And don’t be afraid to ask for help from your family, employer, or friends — having a support system will only help you eliminate your student loan debt for good.
