Jun 20, 2021 09:24 AM EDT By Danielle Beck-Hunter , UniversityHerald Reporter

I get it. You're just trying to make it to graduation. However, if you don't plan for how you will eventually pay back student loans, you might be stuck on the dorm room diet forever.

Being a student can come with money-saving benefits. Taking advantage of free Amazon Prime, medical student discounts, or a free Wendy's isn't worth trading 10 years of debt for a four-year degree. 

It's no secret that student loan debt has gotten out of hand, but without student loan forgiveness being guaranteed, the time to budget life after college is now. 

How much debt does the average college student accrue?

According to U.S. News & World Report, the average higher education graduate of 2019 left college with over $30,000 of debt. Depending on your major and further schooling, this amount could place you either above or below the national average.

How long does it take to pay off student loans?

Most students paying off student loans can take anywhere from 10 to 20 years, which hinders today's young adults from obtaining financial stability post-graduation.

Interest rates for a federal student loan range anywhere above 2.5% to 6% and are the loan type of most student loan holders. Private student loans are next in popularity to federal loans and generally run higher with a broader interest range, varying from 3% to 13%.

With student loan rates more than doubling since the 1980s, today's most educated individuals are less likely to own their car or home before the age of 35. Using the above numbers, a rough calculation of how much a recent college graduate will pay within 10 years of graduation is twice as high as the average entry-level position's salary.

Consistently paying off your debt in monthly installments in the amounts of $300 is good for your credit but will only prolong your debt. Over a 10-year course, you will still roughly spend $40,000 in attempts to eventually pay off your student debt.

Nobody wants to be financially hindered for a decade, and outstanding loans can keep you from qualifying for new auto loans or buying your first home after graduation.

How do college students deal with debt?

If you are currently enrolled in college, how to pay for your accumulating debt is probably mentally stored as a worry for another day. It may be easier to wait until after you graduate, but easing the financial burden now will save you years of making unwanted payments.

A few ways you can start minimizing your student debt now include:

• Start small, finish big: Find a less expensive institution to begin your college education and transfer after your second year. Make sure your credits will transfer to your desired end school, but you could save over half of your education cost by doing so.

• Know what you want to learn: Not knowing what you want to graduate with can stack up a huge bill. Though it's not uncommon to change your major, if you take too many classes not relevant to your degree course, you will end up paying for more degrees than you earn.

• Complete the Free Application for Federal Student Aid (FAFSA): No matter what. Seriously, no matter what, apply. Even if you don't qualify for all of the benefits, it makes you eligible for loan forgiveness later.

• Apply for more than you need: Sounds twisted, right? Actually, by applying for a larger loan, you can use some of the money to save for loan repayment. You can do this every year while you're in school or just in your last year to give yourself more time to find gainful employment after graduation.

• Start paying yourself: Whether you're working or living on student loans, start paying yourself a bi-weekly payment to add to your savings. You'll be surprised how quickly six months post-graduation comes, and even small amounts of money add up.

• Graduate early: Take advantage of work-study and extra classes. By graduating even one semester early, you can save over 10 percent on the overall cost of a standard four-year bachelor's degree.

• Stick to a budget: This won't be the last time you see this tip in this article or in life. Being careful to save what you can and not overspend each semester will pay off.

Reducing Debt Post-Graduation

Nothing is more freeing than independence and financial freedom. A pro tip for living on your own after graduation is to use your student loan payments as a foundation for building your credit so you can get approved for other loan types.  

Getting backlogged by student loans will have serious financial consequences like ruining your chances for a reliable car to get to work. For anyone who is a recent graduate, here is a list to help you get rid of your student debt smarter and faster:

• Refinance your loans: If you have more than one loan or a high interest rate, you should consider refinancing. This option works best for graduates with good credit, and by cutting down your interest, you can pay the amount of your principal rather than the banker's pockets.

• Set up auto-pay and pay more: Paying more than the minimum reduces the length of your loan agreement and allows you to pay more of your principal versus the interest.

• Get a side hustle: Find something that can earn you enough money to cover your monthly student loan payment. Fresh out of college isn't the resume that gets you to six figures, and your budget might be tight. By creating a direct income source for paying off debt, you can use your primary income source for current expenses.

• Apply for loan forgiveness: There is more than one loan forgiveness program, so make sure you get help looking into which options you might qualify for.

• Ask for an income-driven repayment plan: Making big bucks takes time, and if you're making a high monthly payment from student debt, affording life's necessities can become overwhelming. Ask your local Department of Education which program could be best for you and temporarily reduce your monthly rate.

• Do your taxes: If you pay interest on your student loan, whether private or federal, you are eligible for student tax deductions. You can also use the money you get back to put toward your outstanding loan.

• Live at home: Treating your debt payments like rent can cut a 10-year loan in half. Imagine having the financial flexibility of an extra $300 to $1,000 per month to spend on the car or home of your dreams.

How long after graduation do you pay student loans?

You should start budgeting for student loan payments before graduation. Typically, graduates have six months after graduation before initial repayment starts. 

Saving and living on a budget will help you get out of debt faster and onto spending for your present and future.

About author

Danielle Beck-Hunter writes and researches for the car comparison site, CarInsuranceComparison.com. Danielle is a millennial graduate of the University of Nevada Las Vegas. 

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