As the calendar turns to May, many students across the United States and Canada are preparing to graduate. Some are graduating from college or graduate school. Many others are preparing to graduate from high school, and then either enter the workforce or continue their educations in college.
All of these graduations are major life achievements worth celebrating. So in some ways I don’t want to be the bearer of bad news, but graduation can also mean it’s time to really look at and prepare for paying back your student debt.
For high school students preparing to begin college or further study, higher education loans are likely the first ones you will be taking on in your life. Most student loans require you to complete some kind of basic education about the loans, including learning about the life of the loans and their cost often online in a half hour or less.
This introductory information is helpful, but if you are like I was when I graduated from high school a decade ago, you may complete the online “training” with little more thought than going through the motions. Had I paid more attention, I would have better understood the potential for long-term student debt.
Those of you graduating college and entering the workforce will likely have a “grace period” on your loan payments upon graduation. After that period you will be required to make regular payments on your loan debt. Spend some time determining what those payments are and how they are structured, including the amount of interest. If able, I recommend beginning paying them off as soon as possible as to cut down on the amount of accrued interest.
Those who graduate from college and continue education with graduate study can place your school loans in deferment because you are continuing your education. However, if you are working while a student, it might be wise to make some kind of payments toward your student loan debt to at least reduce the cost of interest. (Not to mention that your student loan debt may continue to increase if you have added loans for your graduate education.)
These nuggets and observations are ones I have learned from experience. They are not necessarily bad things, but it’s helpful to have awareness and understanding of them.
Returning to graduation, congratulations on your studies and best wishes on your life’s journeys and next steps!
As we celebrate the graduation season during May and June,
- What questions do you have about student loans and student loan debt?
- What things are you wondering as you make final decisions and preparations for what’s next?
These are the questions that COMPASS will be exploring over the next few weeks. Please join the conversation.
This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.