4 answers
Isabella
Student
Arlington, Texas
1
Question
Updated
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How may I establish a plan to pay off my student debt after my four-year college plan, and if so how long will I be paying off my student debt afterwards?
If I am to be $100,000 in debt by the time I finish four years of schooling, is there a possible way that wont have me drowning in my payments each month?
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4 answers
Andrew Fan
Deals Advisory Associate
4
Answers
Chicago, Illinois
Updated
Andrew’s Answer
While $100,000 is a significant amount of student debt, it is possible to manage it without feeling overwhelmed if you you plan ahead and make strategic choices both during and after school.
One of the primary things to take note of is to really understand what you're borrowing! Really understand what types of loans you are borrowing. Make sure you know the interest rates and repayment terms as federal vs. private loans differ significantly. Try to maximize federal student loans before turning to private loans as they usually have better repayments options and protections (although federal student loans might not be available to everyone).
While in school, live like a student now, so you don't have to later. Keep costs down where you can such as finding an apartment with lower rent or cooking a few meals instead of eating out all the time. Every dollar you don't borrow saves you more than a dollar in the long run due to interest.
Once you graduate, be prepared to budget enough to cover at least the monthly payments. This may be all you're able to pay off for the time being but that is okay! If monthly payments feel high, consider if you qualify for Income-Driven Repayment plans for federal loans (which cap you monthly payments based on your income and family size), or you can also refinance loans later if you credit and income improve, potentially lowering your interest rate.
Either way, as you progress in your career and income increases, do not immediately let your lifestyle increase dramatically with it. Rebalance your budget so that you are able to increase your monthly payments or make payments early if you can. Even paying a small amount toward interest can prevent your loan balance from ballooning.
One of the primary things to take note of is to really understand what you're borrowing! Really understand what types of loans you are borrowing. Make sure you know the interest rates and repayment terms as federal vs. private loans differ significantly. Try to maximize federal student loans before turning to private loans as they usually have better repayments options and protections (although federal student loans might not be available to everyone).
While in school, live like a student now, so you don't have to later. Keep costs down where you can such as finding an apartment with lower rent or cooking a few meals instead of eating out all the time. Every dollar you don't borrow saves you more than a dollar in the long run due to interest.
Once you graduate, be prepared to budget enough to cover at least the monthly payments. This may be all you're able to pay off for the time being but that is okay! If monthly payments feel high, consider if you qualify for Income-Driven Repayment plans for federal loans (which cap you monthly payments based on your income and family size), or you can also refinance loans later if you credit and income improve, potentially lowering your interest rate.
Either way, as you progress in your career and income increases, do not immediately let your lifestyle increase dramatically with it. Rebalance your budget so that you are able to increase your monthly payments or make payments early if you can. Even paying a small amount toward interest can prevent your loan balance from ballooning.
Amanda Spino
Nurse Practitioner
5
Answers
Los Angeles, California
Updated
Amanda’s Answer
Hi Isabella,
My biggest piece of advice would be to apply for as many scholarships / grants as you can while still in school. You can go to your local library or other local community resources that may be able to help as well. If you have a job currently, ask your employer if they are willing to offer any tuition reimbursement. Also many college campus jobs will offer tuition assistants for students.
Also, shopping around for the lowest interest rate and negotiating interest rates when applying for student loans is something I wish I would have know about when going to school. Having a lower interest rate on loans can significantly lower your monthly payment later on.
Once graduated you can find a job that offers loan forgiveness in exchange for working so many years, depending on your degree.
I'd be more focused on minimizing how many loans / how much money you are borrowing right now if you are still in school as this will lessen your burden later on. Hope this helps!
My biggest piece of advice would be to apply for as many scholarships / grants as you can while still in school. You can go to your local library or other local community resources that may be able to help as well. If you have a job currently, ask your employer if they are willing to offer any tuition reimbursement. Also many college campus jobs will offer tuition assistants for students.
Also, shopping around for the lowest interest rate and negotiating interest rates when applying for student loans is something I wish I would have know about when going to school. Having a lower interest rate on loans can significantly lower your monthly payment later on.
Once graduated you can find a job that offers loan forgiveness in exchange for working so many years, depending on your degree.
I'd be more focused on minimizing how many loans / how much money you are borrowing right now if you are still in school as this will lessen your burden later on. Hope this helps!
Sneha Gollavilli
Analyst
2
Answers
Dallas, Texas
Updated
Sneha’s Answer
To keep from getting overwhelmed by debt, start with a simple plan for the length of your loan, like five years. From the beginning, know how much you need to pay and when, and break it down into smaller, easy-to-handle parts. Stick to a budget that puts your loan payments first, and try to cut down on things you don't really need, like eating out a lot or buying things online on a whim. Keep track of your spending so you know where your money goes and avoid losing control. If you can, pay more than the minimum each month to lower your interest and pay off your debt quicker. Having a small emergency fund can also help you avoid more debt when surprise expenses pop up. Most importantly, don't take on new debt while you're still paying off the old—focus on what you owe now and stay on track. With steady habits, you'll stay in control and move toward financial freedom.
Chris Herbert
Chief Content Officer
1
Answer
Atlanta, Georgia
Updated
Chris’s Answer
My best advice, in addition to the great tips about applying for grants, is to pay attention to interest rates. Student loan debt can be considered "good debt" because the interest rates are often lower than those for car loans or credit cards. If you have other debts, focus on paying off the ones with high interest rates first.
To manage this well, it's important to track every penny you spend and create a budget you can follow. When I finished business school, I had over $120k in debt. I started by writing my daily expenses in a notebook, then switched to tracking them digitally with Mint, and now I use Quicken. Your spending should reflect your priorities, so carefully review where your money goes. Try not to change your lifestyle as you earn more, and keep working on paying off that debt!
You've got this!
To manage this well, it's important to track every penny you spend and create a budget you can follow. When I finished business school, I had over $120k in debt. I started by writing my daily expenses in a notebook, then switched to tracking them digitally with Mint, and now I use Quicken. Your spending should reflect your priorities, so carefully review where your money goes. Try not to change your lifestyle as you earn more, and keep working on paying off that debt!
You've got this!