College Loans

**SailorGirl** · 08-02-2006, 10:41 AM

I'm a recent graduate and have about $57,000 in college loans to pay off. That's my only debt, but it's a big deal on a salary around $40K. Has anyone done this? Any tips or suggestions? Thanks!

**Valerie in WA** · 08-02-2006, 11:04 AM

It depends on a lot of things. Are you single or married or a divorced mom of three hungry teens? What are housing costs in your area? Is your car paid for or do you pay for public transportion? How often do you eat out?

I would suggest that you sit down and write out all your expenses, include variable things like groceries, medical co-pays, etc. See whats leftover. Put a bit of it toward savings and the rest toward your debt.

Anytime you come into extra money ($50 from gramma for your birthday, etc), put that toward your debt.

Check the articles section here for information on budgeting and saving money on all sorts of things.

**ewokgirl** · 08-02-2006, 02:14 PM

My parents paid for my university costs, so I can't help you with tips on paying down student loans. I will tell you, however, that it's very easy to get sucked into living the good life when you're fresh out of college. You'll see coworkers or fellow graduates running around in brand-new cars, wearing expensive designer clothes, eating out all the time. It's very easy to fall into doing the same thing, especially if you hang out with these people a lot.

My best advice is to live like a normal person.

By that I simply mean that your housing and transportation costs should be moderate, the clothes really don't matter (as long as you're dressed appropriately for whatever you're doing), it can be fun to cook and experiment in the kitchen, and bringing leftovers for lunch saves a bundle!

If you're young and single, pay down as much as you can right now before you're dealing with a spouse, a mortgage, children, etc.

**kabin63** · 08-02-2006, 02:19 PM

I don't have much to contribute but I think you have been given a lot of good advice. Just start paying it down and not get too extravegant with your lifestyle. You are in a prime position to do well in life. good luck!

**inneedofhope** · 08-02-2006, 07:12 PM

Any possibility of living with your parents for 2 years?? If they would agree to it, you could put the bulk of your income onto the debt and get rid of it quickly.
or look into sharing an apt with a roommate to keep your living expenses down.
On the upside, student loan interest is tax deductable.

**SHOPGIRL** · 08-02-2006, 09:33 PM

Oh, it may seem like a huge debt, but you have a good starting salary. You'll get those loans paid off in no time. What I would do is make sure to consolidate your debt as long as you can get a good interest rate. I have 4% on one set of loans. I have other debt so I don't pay extra towards the student loans. Just be careful not to run up credit cards and get more debt. Also, try to keep other loans to a minimum-like a car. I'm 36 with a good paying job yet I've never owned a new car. Usually the loans give you at least 10 years to pay them off, and a lot of time you can get that time extended. Just try to pay extra when you can if that's possible. It's not the worst debt to have.

**Telephus44** · 08-03-2006, 09:34 PM

I graduated with $17,625 in student loans and made $27,000/yr my first job. Other than paying extra (and make sure to mark your payment to reduce principal, NOT advance the due date) the only other advice I have is to remember the consolidation loans are out there. When I graduated my highest interest rate was 8.875% - I consolidated a few years ago and now have a 3.75% rate. I'm not sure if I'd consolidate now or not, but I'd at least keep it in the back of my mind.

Also check and see if your lender has any perks that will reduce the rate. Mine are through Citibank and they will reduce your interest rate 1/2 a percentage point if you make the first 60 payments on time, and 1/4 percentage point if you sign up for automatic payments. Especially at the beginning of repayment, small things can make a difference.

Also remember that student loan debt isn't necessarily bad debt - its not very high interest rates and it represents a good investment in yourself. Lenders generally view it favorably when considering loans and extending credit.

**SailorGirl** · 08-13-2006, 05:47 PM

Thank you all so much for your responses! It just seems like such an enormous task and I hate the feeling of being in debt (well, I guess it's good that I hate that, right?

). I haven't visited the forums since I started this thread, but I will surely be coming back more often. I suppose that sometimes what we need more than anything is someone to tell us that our goals are possible and that we can overcome. Thanks for being my encouragement!

**wendy** · 08-13-2006, 09:33 PM

What's your occupation? If you're a teacher, you can fill out some forms and have the interest reduced for a year.

For some reason, the biggest loan my husband has (he's a teacher with a master's degree) has been postponed. Yeah, weird. On the last bill, it said next payment due: 02/20/2012. I called to make sure it was correct and the automated lady assured me. I don't know why and neither does he, but I'm still going to pay on it because the interest is accruing.

The best advice I can give you is to stay in good standing. Make sure you pay the monthly accrued interest and some more. The "some more" will go to the principle and will slowly come down.

This bill isn't going to be paid off over night, but dh and I have been paying on it for several months and have knocked off a couple a grand.

Good luck!

**SailorGirl** · 08-13-2006, 10:29 PM

unfortunately, I work for a pretty large government contractor. Well, not really unfortunate, but my loans won't be forgiven or deferred, so that's unfortunate. I've thought about doing the Peace Corps or Americorps (both defer or forgive some loans) but the truth is, I'll be in a better position to pay them off if I stay with my current employer.

I just started work 1 July (graduated college in May) so I know I've got plenty of time...I just want to be rid of these loans ASAP, in part so I can afford the uber-expensive grad program I want. Education is unbelievably expensive. Ugh!

I also moved to a new place (I live right outside of DC) and it's so much more expensive here than it is in my podunk hometown. It's just a lot to adjust to and I want to make sure I'm making the best, most informed decisions I can right now. I want to set myself up for success.