Facing Student Loans after Graduation

You finally graduated, diploma in hand, and you’re ready to launch your career. But before you dive into job interviews and post-grad adventures, there’s one challenge looming large: student loan debt. It’s an issue many new grads face, but the good news is that you don’t have to go it alone. Here’s how to take control of your loans and secure your financial future.

You’re Not Alone

As of 2024, 43.2 million borrowers in the U.S. hold federal student loan debt, with the average balance at approximately $37,088 per borrower.¹ Total student loan debt has reached $1.77 trillion, and many graduates struggle to make payments within the first few years after leaving school.²

It’s tough to manage loan payments without a steady job—or with a job that doesn’t pay enough. While these financial hurdles are real, facing your debt head-on can make a significant difference in your long-term financial well-being.

Why You Should Act Now

Interest Adds Up Quickly

If you owe $37,000 with a 6.8% interest rate on a 10-year plan, your monthly payment could be around $425, and you’d pay over $14,000 in interest by the end of the loan term.

Avoiding Payments Has Consequences

Postponing payments can lead to:

• Missed opportunities for homeownership and travel
• Delayed life milestones like marriage or starting a family
• Negative impacts on mental and physical health due to financial stress
• Difficulty saving for retirement

According to a 2023 survey by Fidelity, 84% of borrowers say student loan debt delays major financial decisions, such as buying a home or saving for retirement.³

Step 1: Understand Your Loans

Start by gathering information:

• Are your loans federal, private, or a mix?
• What are the interest rates and balances?
• When do payments begin?
• What are your minimum monthly payments?

Check your federal student loans at studentaid.gov and review private loan details directly with your lender.

Step 2: Evaluate Your Cash Flow

Look at your current income and expenses. Can you comfortably make loan payments after covering essentials like rent, utilities, and groceries? If not, you may need to explore alternative repayment options.

Step 3: Explore Repayment Options

Federal student loans offer multiple repayment plans:

• Income-Driven Repayment (IDR): Adjusts payments based on your income and family size
• Extended or Graduated Repayment Plans: Lower initial payments with longer terms
• Public Service Loan Forgiveness (PSLF): Forgiveness after 10 years of qualifying payments while working in public service
• Deferment or Forbearance: Temporary pause on payments during financial hardship (though interest may still accrue)

Private loan options vary by lender, but some offer refinancing or temporary forbearance.

Step 4: Take Action

Don’t wait to address your loans. If you’re having difficulty, contact your loan servicer or the Federal Student Aid Ombudsman at 1-877-557-2575. Staying proactive could protect your credit and financial future.

Partner With a Pro

Navigating repayment doesn’t have to be overwhelming. A Money Coach who specializes in student loans can help you:

• Assess your loan portfolio
• Identify repayment strategies
• Build a sustainable budget
• Explore forgiveness programs

Schedule a session with a Money Coach today.

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¹ U.S. Department of Education. “Federal Student Loan Portfolio.” https://studentaid.gov/data-center/student/portfolio

² Federal Reserve Bank of New York. “Quarterly Report on Household Debt and Credit, Q1 2024.” https://www.newyorkfed.org/microeconomics/hhdc

³ Fidelity Investments. “2023 Student Debt and Financial Wellness Survey.” https://www.fidelity.com