Managing Student Loan Debt

Once you graduate from college, your life changes dramatically. You’ll have new expenses, larger sources of income, and student loans to repay. Here is a guide to help you better manage it all. For the answers to some of the most commonly asked questions about consolidating student loans, see our FAQ page.

Start with a Plan

Your new career begins once you get out of college, and you will find yourself facing the novel financial difficulties that come with your new lifestyle. After you graduate, it’s important to revamp your budget to reflect the changes taking place. Your post-college budget should account for the following:

• Student loan payments
• New expenses (food, utilities, entertainment, rent, etc.)
• Costs of saving for retirement
• New salary
• Transportation (car payments, gas, insurance, maintenance, or bus fare)

Consolidate Student Loans ASAP

As mentioned before, the best savings come when you consolidate student loans in their grace periods. That means you’ll want to consolidate as soon as possible. After you’ve established your budget, you will be able to save money on student loan repayment expenses by combining all your debts into one, lower payment. This will give you more money to devote to your other bills.

Establish Good Credit

Usually people don’t have much of a credit history when they graduate from college. Thus, after graduation is the perfect time to begin establishing good credit habits for life. Follow these tips to build good credit:

• Always pay bills on time. This is critical to your credit score.
• Don’t put yourself in danger of bankruptcy or get behind on taxes
• Pay off your credit cards in full each month
• Review your credit report regularly to verify its accuracy and check for identity theft
• Don’t open too many lines of credit at once
• If you do carry a balance on your credit cards, spread the balances out over many cards rather than maxing one card

Take Advantage of Tax Deductions

You can receive deductions and tax credits for interest and education-related expenses on your income tax. These benefits can save you thousands of dollars, in some cases. Consult with your accountant or tax advisor to maximize your tax savings.

3 steps to student loan consolidation