4 Ways To Nip Student Loan Debt In The Bud Today

At the beginning of 2012, there were approximately 37 million people with outstanding student loans.  Of the 37 million borrowers, about 14% of them have at least one missed or late payment.  There is about 870 billion dollars taken out right now, with approximately 87 billion dollars past due.

It’s no surprise that with the terrible economy that upon graduation, it’s not always possible that you’ll start your well-paying career within six months of graduation.  It’s after six months that those monthly loan payments kick in, and it can be tough to make your payments on your waitress wage or minimum wage service job checks.

There is something that you can do, though.  You can start saving now.

“What? I hardly make enough to make ends meet now, and you’re telling me I should start saving now?” you might be thinking.

And my answer is yes. Yes you can, and should.

Don’t take out more than necessary

It might be tempting to take out some extra money at the beginning of the school year in case you don’t have enough time to work enough hours, or so you can have some wiggle room when it comes to your monthly monthly expenses.

Don’t do it!  This isn’t free money.  Even though it seems far into the future, you do have to pay it back.  And the further into the future that it is, the more interest you have to pay back on top of it.

If I can do it, so can you

I work in retail.  I make just barely above minimum wage, and I find myself counting change in order to fill my gas tank up in order to make it to school.  But I’m saving, bit by bit, to start paying my loans back.  I get paid biweekly and put anywhere between 10 and 20 dollars, depending on my expenses at the time and how big my paycheck is, from every check into a special savings account that I don’t touch, no matter what. My checks go into my account via direct deposit, so it’s easy for me to transfer that money right from my computer.

I suggest opening an account rather than putting it in your regular savings or an envelope of cash in your sock drawer.  If you have it in a completely separate account, you have a better chance of leaving it alone rather than spending it.

Refunds – try to restrain yourself

I know it’s exciting to receive your refund check in the mail. But don’t go on a shopping spree with it.  Don’t buy cool new things for your car. If you’re going to spend it on anything, spend it on your school books or other scholarly expenses. If you don’t need any school things when you get your refund check, put it in your account.  As I said before, this isn’t really your money. It’s the government/bank/etc’s money, and no matter what your spend it on, you have to pay it back. So make it count.

Tax returns?

“You’re telling me that I should put my refund checks AND tax returns aside to pay my loans back?!”

Yes I am. I know, it seems rough. You worked all year and the government stole your money. You deserve to have it back. But for now, that money should go back to the government in the form of your loan payments. You can have your tax returns when your schooling is all paid off.  Life sucks.

This sounds like a drag. And it totally is. And it doesn’t seem like much, so what’s the point?  But bit by bit, you’re making your life easier when you graduate. Who knows, maybe you will get a job right out after graduation, and you won’t need this money that you’ve saved up. Then you can treat yourself to something awesome for all the work you did over the past few years to save that money. But just in case, it’ll be nice to have a little bit of padding.

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Carmen Bojanowski

Carmen Bojanowski

Carmen Bojanowski is a senior at Eastern Michigan University, double majoring in journalism and communications. She writes for her college newspaper, mostly covering local bands and interns at 89x, a metro-Detroit radio station. She frequents the movie theater and when she has free time, she likes spend it with her friends. Carmen hopes to one day be a music journalist.