Dealing With Student Loan Debt


student loans

If you have student loans from attending college (Let’s hope you don’t) and you’re a recent graduate, you might be a little concerned about how you’re going to get that student loan debt paid back.

As college tuitions have risen over the years and starting salaries have remained flat or even gone down, it has become much more difficult for many people to meet those huge student loan obligations and get them paid off in a timely manner.

Total student loan debt is now over $1 Trillion and even exceeds total credit card debt according to Allie Johnson at Credit

So how do recent graduates get a handle on paying off those student loans so they don’t hang around like your chain smokin’ Aunt after Thanksgiving dinner?

It all starts with a plan.

Here are a few tips to get you on the right track:

  • Make it Your #1 Priority-  Do not incur any more debt until you get your student loans paid off.  Once you get a job you’ll be very tempted to go into debt for a car, furniture, etc.  But if you put every spare dime toward that loan, then aunt Martha and her Marlboro’s will spend much less time at your dining room table.
  • Develop Good Financial Habits Now-  Learn to budget, keep control of your spending, and by all means, don’t use credit cards or take out any other debt.  Additional debt will only pull you deeper into a hole that it will be much harder to climb out of in the future.  The less debt you have, the better off you’ll be.
  • Pay More Than the Minimum Payment-  If you just pay the minimum payment every month it will take you many years to get your student loan debt eliminated.  When you regularly pay more than the minimum you really cut down on the total interest you pay over the life of the loan.  Your future self will thank you when spouses, kids, and a home purchase eventually come your way.
  • Get a Side Job-  If you’re fortunate enough to have landed a job in your field that’s great!  Now do something really radical, get a part time job and dedicate all that money only toward paying off your student loans.  Adding this money on top of what you’re already paying out of your regular salary will serve to hugely accelerate paying off your student debt and can allow you to pay them off in just a year or two.
  • Live With Mom and Dad-  Another radical move considering most of us would rather be out on our own after college.  But if you can do it with driving yourself or your parents crazy, it’s a great way to be able to pay off those loans in a hurry because your expenses are greatly reduced.  The best way to maximize this situation is to live like you’re still in college, put all of your earnings that you possibly can toward that debt and it will be paid off in no time.  This works even better and faster if you get that second job I mentioned above.
  • Volunteer or Join the Military-  Joining the Armed Forces has the benefit of partial or even full forgiveness of student loans, depending on how long you’re in the service.  There are also government sponsored opportunities such as AmeriCorps, contracting to teach in a low income area, or even working on a Native American Reservation or other programs that the government uses student loan reductions or even total payoff as an enticement to serve in those areas for a certain period of time. 

When you have a plan on how to pay off those student loans before they start becoming a huge problem in your life, you can really begin succeeding with your money.

But when you fail to plan, after a few years they become like that bad relative lightin’ one up in the back seat of that car you want to buy in a couple of years, smoking up the spare bedroom of the house you eventually want to buy, and exposing your future kids to second hand smoke because ole’ Martha just won’t go away.

So do it now, make a plan.

Your future will thank you.

About Dr. Jason Cabler

9 Responses to “Dealing With Student Loan Debt”

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  1. Dan @Payoff says:

    I think your first point is key – not taking on anymore more debt until your student loans are paid off. It’s difficult for a lot of people to understand that advice, but it’s really hard to make any progress when you keep adding to the pile of debt. Having a financial plan is very important too.

    • Yes, too many people can’t fathom using credit cards on a daily basis and carrying perpetual debt. But when you make a plan and stick to it, you can make progress in your situation and actually get it paid off fairly quickly if you get radical about it.

      Thanks Dan!

  2. ImpulseSave says:

    Great tips! One of the most helpful and simplest ways to reduce student debt is by paying more than the minimum payment and paying it off early! Most Sallie Mae loans have a 6-month grace period during which you are not expected to make payments and may not be accruing interest. However, as soon as you graduate – or even before you graduate – you can start paying down that principle and reducing your payments for years!

    • The quicker you attack that stuff, the less time it has to mess with you and take over your financial life. When you have loans and have degree in hand, your #1 priority should be attacking those loans until you’ve beaten them to death!

  3. Ian says:

    I can personally attest to getting a side job. Making more money is, for me, the easiest way to reduce debt. While my friends and family watched TV in the evenings, I worked as a freelance writer or started simple product based websites reviewing household goods that I actually own. The extra $500-1000 a month wiped out my debt in less than a year!

    Now I run a debt consolidation loan site where I try to not only help people lower their bills with a consolidation loan, but advise them on ways to save money and make money so that they can get debt free as quickly as possible.

    I remember a quote from a billionaire property magnate and he said (paraphrasing) “When the thing you want is all you think about, every single day, then it’s not a matter of if you achieve it, but when.” If you want something badly enough and it consumes your thoughts, it’s only a matter of time until you get it. Apply that to debt, making money, or whatever you want.

  4. I agree, making money on the side is by far the best way to accelerate paying off debt. When you do that you really shorten the time period to pay it all off as well as the amount of time you have to experience the pain of dealing with outstanding debt. More people need to realize how well it works.

  5. Kris says:

    The costs of college are definitely out of control, as I’m learning with my oldest having just completed his freshman year. Even though he goes to state school it is still expensive (we live in CT where everything seems to be expensive). I just hope he gets a real good job so he doesn’t have to struggle with loans for too long.

    • As I said in the article, the best thing you can do is to not take out loans in the first place. I know that sounds difficult if not impossible to do, but the first step to doing it is changing over to a mindset that says “We can pay for a college education with no debt”.

      I challenge you to read an article that I wrote titled “Obama, Student Loans, and You”.

      It’s not a political piece but it talks about changing your mindset about student loan debt.

      Also, I challenge you to read the book I mention in the article call “Debt Free U” by Zac Bissonnette. It’s a great book that will show you everything you need to know about how to go to college debt free by a guy who’s actually done it.

  6. Kelsey says:

    Making it your #1 priority can ensure that it gets paid off as soon as possible!

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