Student Debt Woes—Managing Finances and Curing Debt in the "Real World"

By Aniya Wells

There are few things more terrifying than entering the world of financial responsibility for the first time. Many of us truly enter this adult world after graduating college and earning a degree towards our career. Of course, upon graduating from college and entering the world of financial responsibility, we are also faced with paying off student loan debt and landing a job in the most challenging job market in decades. It can be an extremely overwhelming time for any individual. While debt is always a stressful thing to cope with, it can be especially so for those who are completely new to the process. Use these tips and guidelines to better manage your student debt right out of college and become a fully functioning "real world" citizen.

Do Your Research

Before you can fully tackle difficult student debt it is essential that you educate yourself on your debt situation and how student loan repayment works. Yes, this may mean spending sometime outside of your college campus looking through documents and studying papers, but it's well worth it. Do your research some. Figure out what the terms of your student loan or loans are. When is the grace period of your loan over? Just how much are you going to have to pay each month? What do your interest rates look like? These are all essential questions that you need to be able to answer before you start paying off your loan. Take the time to look through your loan agreement. There may be some things in the print that surprise you and most loan agreements work to provide a general explanation of how loan repayment works.

Meet that Minimum

Once you've done your research on when you need to start paying your loan and what your minimum balance should be, the next step is actually making the payments. You should be sure to always meet that minimum balance. While this can feel completely impossible at times, try to take a close look at your finances and see where you can improve your budgeting. Many people put loan repayment as a last factor in their budgeting plans—this is the wrong way to go about things. Try to get yourself out of debt first, spend and get where you want to be in other financial matters later. It is recommended to try to meet that minimum payment amount each month along with as much extra as you're willing to spare. Even just five or ten dollars more a payment can make a huge difference in the long run.

Stay Current

Be sure that you are staying up to date and current with the news and policies concerning student loan debt. With so many young Americans finding themselves head under water the day after graduation, the government and many loan agencies are working to help the young generation. There are new government pardons and subsidies that are put in place to help out current "real world" adults dealing with student loan debt. Things can change in legislation that may affect your payments, so try to stay up to date on all things student debt.

Author Bio:
Aniya Wells particularly loves reading and writing about online education, although her interests span different niches as well, including personal finance, parenting, sustainable living, and more. Accredited online degree programs are hard to find in the online morass of scams, so Aniya's ultimate goal is to help her readers figure out the maze of online education. She can be reached for questions or comments at aniyawells@gmail.com.

How did Jennifer get rid of her debt?

Guest post by Jennifer Lohan

Getting out of debt requires great effort and when you have dependent family members, nothing can be worse than that. Jennifer faced a similar situation. Her husband passed away long ago. She is the sole breadwinner of the family and her in-laws are also living with her. She has four credit cards that she used on and off whenever she was short of cash. Since her income wasn’t sufficient to keep up with her monthly payments, she soon fell into debt. She did whatever she could to find the best debt consolidation company for her needs and at last found one. She has signed up for their debt consolidation program. For finding the best debt consolidation company, she took help of her friends, family members and useful online resources. She wanted to eliminate her debt burden once and for all. So, how did she get into the debt trap?

Falling into the debt trap

There are mainly two particular reasons that can push you into a vicious debt trap and make your finances go out of control. The first is an unexpected job loss and the second is a health condition. Hence, what would you do in this type of circumstances? Jennifer was regular with her payments till her husband suffered a job loss. The situation became worse when he died of cancer. This was truly a defining moment in her life. She finished up all her savings and also took money from friends and family members in her futile attempt to save her husband.

Jennifer’s monthly income was not sufficient to manage her debts. So she went to some creditors for credit. Furthermore, she began to use her credit cards oftentimes. For the first one or two months, there was no problem and Jennifer was regular with her payments. When the subprime mortgage meltdown took place, a number of credit card companies lowered their credit limits and modified credit card payment plans. Jennifer didn’t have any idea about this. As a result, she lagged behind her payments since she didn’t have the ability to make the minimum monthly payments.

How did Jennifer get rid of debt?

As soon as she started facing credit problems, she acted intelligently and talked to a credit counselor. Jennifer was cautious about the ill effects of filing bankruptcy since a number of her friends had gone for the same option. She didn’t let her balances pile up to a huge amount. Jennifer’s financial condition was thoroughly evaluated and the credit counselor advised that she should go for a debt consolidation program.

As Jennifer was already restructuring her finances, she didn’t wish to spend an excessive amount for a consolidation program. She selected a non profit debt consolidation company. Before signing up, she also confirmed that whether the company is affiliated with the BBB. As soon as she was confident about their trustworthiness, she signed up for the program.

The consolidation agency asked for nominal fees against their services. They carried out negotiations with her creditors and persuaded them to lower her interest rates and monthly payments. All her debts were combined into a single affordable monthly payment. A repayment plan was set up that helped Jennifer keep tabs on her monthly payments. She followed the plan sincerely and became debt free in the end.

Thank you Jennifer for this post.

The site Jennifer links to Debt Consolidation Care, Internet's first get-out-of-debt community is a fine resource of both information and people. People trained in debt law, professionals with experience in the field, people who have gone through getting out of debt and people in the process of getting out of debt. It is a place where you can ask questions and get help.

I do have a few words of caution though. When seeking help getting out of debt please beware.

1. Avoid actual debt consolidation loan programs.
2. Avoid programs that require a substantial payment up front. The program should actually cost you very little or nominal fees as stated in the post.
   
3. Avoid companies listed with the Better Business Bureau (BBB) that have substantial complaints against them. Being listed with the Better Business Bureau is not a seal of approval or measure of trustworthiness, but mounting complaints against a company listed with the BBB should be a dis-qualifier. From the BBB site.
   

   BBB accreditation does not mean that the business’ products or services have been evaluated or endorsed by BBB, or that BBB has made a determination as to the business’ product quality or competency in performing services.

4. Use Common Sense. If something a company is telling you seems wrong trust your instincts. Go elsewhere, ask questions, walk away from what seems wrong and get more information. Just because your in debt doesn't mean your stupid. Take a deep breath, take charge of your situation, ask more questions. You may need help, need guidance but you don't need someone trying to profit from your pain.