Student loan debt is ballooning in this country – collectively, it has reached $1.2 trillion dollars and that number is growing. The average student will graduate with $40,000 in student loans.
Many students who graduate from college feel a sense of existential dread when they are sent their first bill for student loans. Starting your new post-grad life with tens of thousands of dollars in debt can be shocking. With that in mind, here is a five step guide to help you hit the ground running with your student loans.
- Make sure you know how much you owe, and to whom. You can locate your federal loans through the National Student Data Loan System. For private lenders, you will have to contact the lender to find out what you owe, and once per year you can order a free copy of your credit report from the three major credit-reporting bureaus to see who your lender is.
- Come up with a payment plan. Several lenders offer income-based repayment, in case you are not able to afford paying several hundred dollars per month for your loans.
- Pay down the highest interest loan first.
- If you are having trouble managing all of your loans, consider student loan consolidation to simplify things.
- Live within your means. This could mean avoiding going out every weekend, eating cheap and living with a roommate – but the sooner you get your loans taken care of, the sooner you can pursue the life that you want to live.
If you are struggling with huge amounts of debt, discuss your case with a bankruptcy lawyer to see if there are any options for managing your debt.