Last Updated: July 22, 2013
The grace period on your student loans, usually the first six months after you’ve graduated college, can be a very strange and troubling time for many individuals. Some graduate college with a plan already in hand for their next step, whether it be traveling, graduate school, or an entry-level job. But there are plenty of others who are unsure of their next steps, and they spend their first months with their degrees figuring that out. Knowing your loan payments are about to kick in soon doesn’t help matters, and can cause great stress, especially for those who don’t have jobs. If you’re feeling a little lost as a new college grad, you may feel better grounding yourself by taking control of your debt with these three steps before it’s time to pay up!
Size up the Monster: While your natural reaction to your debt might be to pretend it doesn’t exist until your first payment, it’s better to get an idea of what you’re dealing with. When you know what you’re dealing with, you can take better control of the situation and find solutions. Determine how much money you owe, how much your monthly payments will be, and when you’ll have to start paying everything back. While this information can be scary at first, finding out during your grace period can help you to better prepare.
Take Stock of your Resources: Now that you know exactly what kind of monster you’re dealing with, you can take stock of the materials you already have that would help you take control. Do you have a job? Does your job pay enough to afford student loan payments? Does your job qualify for loan forgiveness? Are you paying to live on your own or are you living with family? Do you have extra money you could put toward loan payments? Consider your current situation in all aspects when facing the debt monster and determine how well you stand against it. Can you easily pay off your student loans by making the standard payments, or will some things have to change in the next six months?
Design a Plan of Attack: Now that you’ve figured out how much money you owe and where you stand in your ability to pay it off, it’s time to form a plan of attack! If you’ve discovered you can afford your monthly payments without an issue, your plan is to make those payments until your debt has been defeated! If you’ve discovered making payments is going to be a problem, your plan of attack will be a bit more intricate. For you to beat the debt monster, you’ll have to weaken its abilities, strengthen yours, or a combination of the two. One way you can reduce the debt monster’s power is to look into other payment plans besides the standard payment. By lowering your monthly payments to an amount you can better afford, you’re taking control of your debt monster. You can strengthen your power to pay off your loans by living cheaply for a while, weather that means living with your parents or with a couple of roommates. You can also start saving during your grace period.
Check out Cappex for more resources to help with life after college.
Original Post Date: June 26th, 2012