So you just graduated and received your diploma but glorious student debt is lurking in the back of your mind. First off, Congratulations! Even with all that is going on in the world right now, take a moment to appreciate your graduation. You’ve put in years of work and you’ve finished the long hard road that is higher education.
Although it is exciting that classes are over and the endless assignments are finally done, it can also come with some anxiety as to what comes next. You may be starting a brand new job, moving back home, or concerned about your student loans. It is a lot to take in but what I want to do in this series is lay out some tips I used to get a strong financial foundation. This way you can reduce your debt, learn to save, and start to build investments that will help you build wealth as you start this new chapter of your life.
When you graduate and you are also blessed with the joy of student debt, the first thing you want to do is evaluate the structure of your debt. Ask yourself these questions: Are they private student loans? Are they government loans (subsidized and unsubsidized)? What is the current interest rate? What is the monthly payment?
*(A quick side note on government loans: Subsidized loans are loans where the government will pay the interest on the loans while you are in school. Unsubsidized means the interest will accrue even while you’re in school thus increasing the balance on these loans.)
After you determine the structure, focus on the interest rate and monthly payment. Then take a look at private lenders that will allow you to consolidate your loans and potentially reduce your interest rate and monthly payments. Some lenders you can check out are SOFI, Citizens One, or Penfed just to name a few. Also, Smart Asset Student Loan Comparison Tool is a great way to see options from a variety of lenders.
If private loan consolidation isn’t for you, there is also a Direct Federal Loan consolidation program. This program won’t lower your interest rate but will allow you consolidate your loans and potentially reduce your monthly payments. This option does not require a high credit score so if your credit history is an issue with private lenders this is another option. For more info on this program check out Direct Consolidation Loan Info.
[FUN FACT: If you have money left in your 529 plan you are allowed to take up to a lifetime maximum of $10,000 and put it towards your student debt. If you are planning on deducting your student loan interest from your taxes don’t take the distribution from the 529 in the same year since it will disallow the interest deduction.]
This is wraps up Part 1 in our Finance Tips for College Grads series. Make sure your sign up for our email list to get notified about Part 2. Again Congrats on earning that degree, you should be proud of your accomplishments. I hope these tips can help you reduce some anxiety and give you some confidence in your future.
Finance Challenge Week 1
We will be doing challenges each week, so you can apply the information that you learn from us. This week’s challenge is to evaluate your student debt and understand how much you owe, the interest rate, and the monthly payment. Go get after it! See you guys next week!
Thanks once again for reading and I hope you found something useful in this post. We here at Strong Dollar want you to become the best version of yourself and that’s why we preach fitness and finance because we believe that the two go hand in hand when creating an amazing life. I hope you stick around to follow us on this journey, so we can continue to educate the masses.
Remember Fitness + Finance = Freedom!
-Strong Dollar Team
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