If you are in the process of finishing up your degree, then the looming thought of beginning to repay your student loan debts may be on your mind. The cost of a college education is higher than ever these days, and with fewer students receiving financial assistance from parents and family members, an increasing number of them have no real option but to take out student loans. Since most lenders require that borrowers begin repaying these loans around six months following one’s graduation, this can make the home stretch of one’s degree program seem quite stressful. Here are some TD ways to save money
Apply for Jobs in Your Field
The key to cutting down on stress of paying of your student loans is to plan ahead of time while still in school. For starters, this should include beginning to apply for jobs in your field towards the end of your degree program. This way, it is actually possible for you to secure a salary job the moment you step out of graduation. By doing this, you’ll have something to look forward to upon graduating and you can also enjoy the peace of mind in knowing that you will have a steady and reliable income. This will help you when it comes to beginning to pay off your student loans.
Pay Off Interest Ahead of Time
Another piece of advice that you may want to follow to save you from financial troubles after your graduation is to pay off your student loan interest while you are in school. Unless you have a subsidized loan, your student loan accounts will accrue interest while you are in school. The last thing you want is to graduate and immediately have hundreds or even thousands of dollars in interest that you need to pay off before you can even begin making a dent in your principal balance. Furthermore, if you fail to pay off your interest before your first loan repayment date, it may capitalize and be added to the total balance of your loan, thus costing you more money in the long run.
Set a Budget
Finally, you should take the time to create a budget for yourself during your last year or so of school, if you have not done so already. Analyze your monthly income if you are working while in school in addition to your monthly expenses. With whatever amount of money that is leftover, make it a point to save some of it. This way, you can have somewhat of a buffer in the event that you are unable to immediately find a job after graduation. Furthermore, if you do find a job right away, these funds can be used to pay off loans, place a down payment on a car – perhaps a flashy new BMW or decked out Ford Explorer. And, of course, the sensible option would be to continue to build interest in a savings account.
Looking Towards the Future
Overall, the prospect of graduating should be an exciting one. It is understandable, however, that finances can make the situation feel a bit more stressful. By keeping these TD ways to save money in mind, you can relieve some of your stress by planning for your future ahead of time.
I had a ton of jobs while in college, some related to my degree, some not. But the best saving was a company paying all my tuition for business school in exchange for working for them part time while at school. I was able to graduate debt free.
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Yep, student debt can knock the wind out of financial sails before you even leave the harbour on your quest to financial freedom. I can certainly agree with you for the need to tackle the debt as early as possible or simply not take on any debt and work ones butt through college. Given the ballooning amounts of student debt, getting creative and smart about repayment is a very prudent move.
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This is standard procedure. I have just reached the point where its time to start paying back my student loans and the federal government can’t even tell me who my loan servicer is. This is the same charlie-foxtrot we’ve witnessed with MERS and mortgage-loan servicing. Show me the paperwork!
This is probably one of the most personalized factors to consider. There is significant variance between where a particular person thinks they’ll be in five years and how much they’re willing to bank on it. As a newly-minted attorney working for a startup I have reason to believe that my human capital will only grow in the form of legal and business experience, personal and professional connections, and being able to display a diverse skill-set. But for those of you keeping score at home, you’ve probably noticed that I’m not the type of person who wants to count on that. So I basically split the difference when it comes to thinking about my human capital and student loans. By splitting the difference I mean that I’m not paying off my loans aggressively, but I’m not on income-based repayment either. I’m making regular, standard repayments. I strongly considered going on IBR (because I could be), but ultimately felt that I should make the better long-term choice since I was on the fence. I prefer to err on the side of caution.