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College Debt - 3 Tips for Digging Your Way Out

By Edited Nov 13, 2013 8 16

A Little Self Control Goes a Long Way

“I’m going to be paying on my college debt for the rest of my life!”

I can’t tell you how many times I’ve heard this complaint. Heck, I’ve even uttered it myself a few times. The fact is that the overwhelming majority of college graduates have to deal with paying off their education over the course of many years. For most, it’s difficult to see the light at the end of the tunnel. These are the ones from which you will hear the most complaints.

But what most of these complainers have in common is that they don’t have a real plan for getting rid of their college debt. For most people, the plan is simply to keep applying for forebearances and deferments until their student loan companies start demanding their money back.

Consider the following steps to make wiping out your college debt a no-brainer:

1. Avoid Credit Cards. I know this goes against everything your parents might have told you about establishing a good credit record, but if you don’t have any self control, then credit cards will hurt you more than they will help you.

This is something I know from experience. When you first graduate from college and land your first job, the possibilities seem endless. You suddenly feel financially independent. You feel like you can buy whatever you want. And whatever you can’t afford right away, you can just throw it on a credit card. After all, the monthly payments aren’t that bad!

The problem with this trap is that credit card debt can creep up on you and overwhelm you before you know what’s happening. It starts with something small, like an iPad or a new bicycle, but before you know it, you’ve got $10,000 in credit card debt, and you’re shelling out $250 a month just to meet your minimum payments.

If you were to use that extra $250 a month to start paying down your student loans (in addition to your regular payments), you could easily get rid of your college debt in just a couple of years, if not quicker.

Don't buy that iPad until you can pay for it with cash.

2. Live Below Your Means. It’s hard to tell a fresh college graduate not to spend all of his or her paycheck. For most recent grads, a full-timer’s salary is a whole new experience. Suddenly, you can afford to eat anywhere you want, and when you go apartment shopping for the first time, there is an overwhelming temptation to spring for the fancy 3-bedroom with wooden floors, a personal garage, and racquetball courts. And since you just bought a fancy new flat panel television, it’s now absolutely essential that you purchase all the premium HD channels with your cable package.

Slow down. This kind of thinking is what gets that snowball of debt rolling so quickly that you end up paying for it for the rest of your life. Remember that the more you practice self-control now, the more you will be able to enjoy the fruits of your labor later. Don’t spend every spare penny you make. Many will tell you to live within your means, but I’m telling you to live below your means.

3. Guard Your Optimism. One of the biggest mistakes I made after graduating from college was that I made financial decisions based on where I thought I would be in the future. I bought a new car that advertised no payments for a year, even though I already had a vehicle that ran perfectly and was almost paid off. The monthly payment for the new car seemed a little pricey at the time, but I was sure that in one year, I would have no problems making the payments.

The problem is that you have no idea what the future holds. Unfortunately for me, shortly after my car payments kicked in, the small web design firm I was working for collapsed, and the wretched man I worked for left me with an unexpected $7000 tax bill. I was only a couple years out of college in a waning job market with a $420 monthly car payment. Can you guess how much I was paying towards my college debt? That’s right–not a cent.

Even though it may go against everything you want to do, I want to challenge you to avoid applying for deferments. Use your deferments and forebearance requests as a last resort. Live below your means, pay extra towards your student loans, and in just a few years, you’ll be extremely glad you did!



Apr 30, 2011 4:28pm
great article thumbs up here! Lots of info and well written.
Apr 30, 2011 5:54pm
I loved the article. I'm racking up the debt right now, so hopefully I can pay it off soon!
Apr 30, 2011 11:12pm
Fantastic article. I think the tide is turning against easy credit, including student loans that are given to almost anyone with a pulse and a co-signer: the prime cause of tuition inflation. I would add one more tip: minimize it as much as possible before graduating. College debt is the most toxic of all. There's no way to get out of most student loans, even declaring bankruptcy won't let you off the hook thanks to changes that were made in the mid-2000s.
May 3, 2011 12:21am
I'm five years out of college and still paying off my debt.
May 4, 2011 12:37pm
Sound advice for those who have or haven't been to college.Congrats on featured status!
May 5, 2011 6:50pm
Thumbs Up! and congratulations.....Thank You!
May 12, 2011 9:34pm
This is a great article! Living below your means is the way to go. Living within your means could mean that the smallest hiccup in life outs you in a bad spot. Leaving below your means could be the difference as you will be able to pay off bills quicker and save more as well. Thanks!
May 13, 2011 10:28pm
Its pretty hard to maintain that debt. Thanks for the heads up...I just graduated lol
May 14, 2011 1:39am
There is a lot to be said about living below your means. The most difficult part about executing this strategy is resisting the temptation to match your peers or neighbors. I completely agree with you, everyone should live below their means. Your the only one that is going to experience your retirement, it will not matter if you had a Mercedes, the only thing that will matter is whether you helped your children through school, and enjoyed retirement.
May 14, 2011 10:54pm
The credit card tip is a lesson that needs to be learned by most people my age. Good work!
May 16, 2011 10:24am
Great advice! Our daughters will be paying off college debt for several more years, and that's with us helping them. College debt is pulling down a lot of our young people, so any advice they can get from their peers will help a lot of them.
May 21, 2011 1:49am
Thank you for this, I'm still deferring almost a decade on. This is causing me to reconsider.
May 26, 2011 11:08pm
I like your post. Living below your means can be a significant part of a new graduate's strategy in paying off debts and saving a little extra, but this is easier said than done because most of us are hardwire to spend our earnings as soon as we receive it. The most important aspect we can do in lowering our debt is practicing self discipline (whether it is shopping, eating, or saving habits).
May 28, 2011 5:59pm
You can also save beforehand by taking some of the prerequisite courses at a local or community college. Make sure that the courses will transfer over and you can do the two and two program, which will allow you to get the framed degree from your major university of choice on graduation day.

A highly discounted diploma. Now theres something to toss your hat up in the air about.
Sep 10, 2012 10:19pm
The writer of this article is ahead of the game. The best way to pay for college is to create passive income to support your schooling while you are doing it. Infobarrel is a great place for (especially creative writing) students to be!
Nov 23, 2012 3:20pm
Great tips. i just did a similar article and I agree with everything here.
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