Managing Debt with an Educational Loan

In today's world, owing money on student education loans has become as commonplace as making payments on a new car. Most college bound students accept this as an inevitable reality of attending a university. Unfortunately, many of those students put off thinking about how they are going to repay those students loans once they graduate, and the debt management planning and skills required to do so effectively.

Student loan debt is usually not the only debt a college graduate finds themselves having to deal with upon graduation. Many have accumulated thousands of dollars in credit card debt as well, which makes the thought of repaying their debts all the more daunting. Consumer Credit Counseling Services (CCCS) agencies like ours say that when it comes to your finances, planning is key, so learning debt management skills now can help ease the burden of handling debt upon graduation.

Drowning in Debt – You Are Not Alone

If you are deeply in debt from student loans and credit card debt, take some comfort in knowing that you are not alone. Many students and graduates are experiencing the same debt management issues. Just take a look at these statistics from the National Center for Education Statistics:

• $19,300 – Average amount of debt per college graduate
• Two-thirds of recent college graduates at four-year colleges and universities carry student loan debt (66.4% in 2004).
• 25% of college graduates borrowed greater than $25,000 during their undergraduate tenure.

The Price of a College Education

The fact is that tuition rates are getting higher in colleges across the country, so it is becoming increasingly expensive to attend college. Due to this trend, college students are also becoming more dependent on student loans to finance their education.

Unfortunately, lending institutions for financial aid and grants are not as generous as they once were, so the need for students to develop strong debt management skills early on is more crucial than ever. Many students don't take into account the amount of money they are being loaned, and therefore get quite a shock when repayment time comes. When borrowing money, students should consider their other expenses, such as credit card debt as well as factor in the probability of rising interest rates.

Anticipating Post-Graduation Expenses

At some point, reality sets in and college students know that their college days will not last forever. They will have a lot to think about—where to live, what career path to take, and of course how to afford it all. Thinking ahead about your debt and how to handle upcoming expenses can be a tremendous help to prepare you for "real life." You may consider contacting a professional credit counseling service professional for guidance in mapping out a personalized plan. Consider the following:

• How much will I pay for rent?
• How much will I need for utilities?
• What big purchases will I need to make (car, computer, etc.)?
• What salary will I need to make to maintain payments and pay off debt?

There are many more questions that will need to be addressed, but these provide a start. Taking the time to anticipate your future expenses will make you much better prepared for handling your financial future.

Debt Management Advice for the College Graduate

Many college graduates finish college with a wealth of knowledge on all sorts of topics from biology to psychology. For all that a college education offers one important area of study that is not covered is how to handle personal financial matters. Professional consumer credit counseling agencies like ours offer the educational resources that advise consumers on budgeting matters and effective debt management options. Some tried and true suggestions for managing debt are:

• Keep a written budget – Try to keep everything you spend recorded in an organized fashion. This will help you visualize where your money is going and manage your debt effectively.
• Ask for help – If you are encountering problems with debt management and keeping up with all of your bills, contact your creditors and ask about deferment options. Many creditors are willing to help.
• Pay down highest interest credit cards first – The most effective way to pay down your credit debt is by making payments toward the highest interest credit cards first. Pay more than the minimum payment required if possible, and reduce your debt even more quickly.
• Make payments on secured debt before unsecured debt – Secured debt includes that which is secured by a lien on the debtor's property. This includes such debt as mortgage or car loans. This should be done in order to pay down the cards with the highest interest rates

Debt Management Options for Student Loans

Knowing your options for repaying your student loans can make a big difference to how you manage your debt. One option is to consolidate your student loan debt into one loan at a lower annual percentage rate (APR). This way, you will only have to pay one monthly payment at a lowered interest rate, which could help ease the burden of managing other debt.

There are also information hotlines that have been established by the federal government, which are specifically designed to help students to best handle their education debt:

• Federal Student Aid Information Center: 1.800.433.3243
• Federal Student Aid Default Hotline: 1.800.621.3115

Where to Turn for Debt Management Assistance

As a college graduate, chances are you find yourself carrying quite a bit of debt upon graduation. If you are unsure of just how you are going to cope with the reality of credit card debt now that you are starting to pay back your student loans, options are available.

Debt management help for your unsecured debt (such as credit card debt) is just a phone call away. For professional guidance and educational materials to aid you with your all debt management needs, contact a Consumer Credit Counseling Services (CCCS) agency like ours today.