Yes, you read that right. It is crazy to pay your loans off after graduation.

But why? According to the Oregon Tech website, 88% of their graduates are employed within six months, raking in an average salary of $54K per year, and the average loan debt is a mere $30K. Seems totally doable. “With figures like that I could pay my loans off in, like, two years!”

OK, then. Why does it take between ten and twenty years for most graduates to pay off their loans, according to the latest figures from US News?

I’m not saying you shouldn’t pay your loans off at all, that would be irresponsible and immoral. It’s gotta be done, so what’s the best way to do it?

  • Debt forgiveness programs available to teachers, health workers, etc.?
  • Join the military?
  • Loan consolidation?
  • Hide under a rock?

The problem with these “solutions” is twofold:
1. The behaviors and choices that caused the debt are not altered
2. People who take these routes are still not free – they still owe someone else their time and they’re still locked in

The key point here is after graduation. The very best time to pay off your student loans in while you’re still in school!

You’re in a supremely unique position while attending college to maximize your income, cut costs, and make small incremental steps to actually beat your debt from the inside.

Slash expenses, increase income, and have some fun being creative about your money are the top three ways to debt-proof your degree.

Take these actions right now to get started:

  1. Create a Skeleton Budget – how much do you suppose you spend for the bare essentials right now (rent, food, transportation, utilities, tuition and fees) each month? Tally this up on one side of a page. Add up your wages, scholarships, and other income (but not loans) on the other side.
  2. Discover how much you’re borrowing – Look at your financial aid award letter or go online, check the loan amount for the year, and divide by 12 to get the monthly amount.
  3. Adjust your Skeleton Budget to reflect a decrease in borrowing by 34% – what can be changed to make it happen? The average student borrows about $500 a month, so 34% of this is only $175. Get creative, I know you can eliminate $175. Decreasing monthly borrowing by just 34%  will decrease the average student’s post-graduation loan burden by over $10,000!
  4. Create a little extra income and send a payment toward your student loans this month. Even $25 per month will keep interest from eating up your post-graduation earnings. Getting into the habit of attacking your debt from both sides each month will get you fired up! Start with just one thing – mow one lawn, clean one house, babysit for one night – and send that money right to your loan. You’ll be surprised how little things can add up.

Small strokes fell great oaks.

Let me know how you do in the comments.

Until next time,
Do Brave Deeds and Endure
– Ben at Debt Freeks