For many students, graduation has come and gone. Now comes reality and that means paying back student loan debt and other bills. The joy of graduation can quickly turn into financial tears. Kristen Binette, with Call Federal says most students don't think about repaying loans. She says, "Usually it is once they hit graduation day that reality sets in and they realize, I have $23,000 to repay in student loans. That is what the average student owes."
For Shanice Harris, a Sophomore at VCU, the thought of graduation is exciting — paying back loans is another story.
"You encourage students to go to school but this kind of debt is definitely a deterrent for many people."
If you've already graduated or will soon, it's not all bad news, financial experts say there are ways to ease the financial headache. Binette says, "Know what you owe. Too many students are not sure how much they owe in student loans. They don't know who they owe the money to."
She says the process starts with a budget and a little math lesson, addition and subtraction. If you don't have the money or can't afford it -- don't spend it. "Probably the biggest mistake that anyone makes is ignoring the problem," Binette says.
College graduates may not want to hear this but financial experts say you may want to consider moving back in with mom and dad. It could help you save and pay back some of the debt. Binette says, "Don't be spending money if you are in that position. Don't go out and have an apartment with a monthly rent that is due. Think about spending time, maybe a year's time with your parents saving up some money."
Also, try cutting back on expenses like phone bills, eating out and shopping sprees. If you're looking for help, contact your lender. Many times you can get the payments deferred until you are able to repay. College debt may not be the only bills you have, so remember to prioritize. "When it comes to prioritizing and paying down one of those balances, first go to the one that has the highest interest rate. That is the one that is going to cost you the most money over time," Binette told us.
There are also free resources and websites like my Money.Gov that offer tools like budgeting worksheets and monthly payment calculators. And when it comes to your money, be careful where you put it, not all financial institutions are equal. Binette says, "You don't want to be paying fees that you don't have to pay. Look at the fine print, look to see if there are monthly fees associated and if there are minimum balances associated."
A little planning and financial responsibility can put the excitement back in graduation. Financial experts say graduate school can also rack up debt. Binette says it is no guarantee that you will get a job after graduate school, so evaluate your situation and make sure it makes financial sense.
Here are some helpful links:
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