Student Loans: The College Hangover

Headache by Maggiejumps, on Flickr

Once I saw a doormat that said something along the lines of “Real Life: The hangover after college.” Having been in college at the time, I thought it was amusing but shrugged it off because is was also incredibly depressing. That couldn’t be true; the real world wouldn’t be that bad.

Oh how wrong I was.

Just kidding, life really isn’t that terrible. But I do see the point that doormat was trying to make.

The real world is kind of like a hangover for college grads.

While you’re in college, you can have a blast taking interesting classes, socializing, involving yourself in clubs and sports… Maybe you have one or two part-time jobs, but for the most part you’re consumed in a world of exams, assignments and friends. It can be overwhelming, but for the most part it’s an amazing experience.

And then you graduate.

Now you’re suffering from the queasiness of not having a job, the tired and dizzy feeling of struggling to make friends and the never-ending headache of bills, including–yes–student loans.

Since the only one of these symptoms actually caused by college is student loans, I’m going to go ahead and say that this is the college hangover.

For me, going through college was like opening a tab at a bar and then having the night of your life. I didn’t know exactly how much tuition was, or housing… I had a general idea but I knew I wouldn’t really have to think about it until later.

I didn’t pay for tuition; I only paid for rent and the other joys of apartment living. My parents didn’t pay for tuition either. They did help me out, but for the most part the task of paying for my four years of education was left to future me, which is now present me. Hooray!

Luckily, I went to school in Wisconsin, a state with many wonderful and affordable public institutions, so my loans aren’t in the triple digits or anything crazy like that. But even if I put nearly half of my monthly income toward loans, it will still take me about two years to pay them off. Blerg.

If your college hangover is sometimes too much for you to handle, keep these things in mind:

You can get a deferment

I was completely unemployed for ten months after graduation. You’re given six months to get yourself together, and then you need to start paying loans. I payed off a few months with my savings before realizing I couldn’t keep that up without an income. So I called my student loan company and requested a deferment. People qualify for deferments if they’re going to grad school, joining the peace corps, in the military, just finished serving in the military, or, hey!, having trouble finding full-time employment. All you have to do is call and fill out a form; it’s really easy. Just make sure you don’t wait until you’re down to your last dollars to do this, since it can take a few weeks for you to be approved.

On average, you can defer your loans for up to three years if you can’t find a full-time job. But if you have the means, you should at least pay your monthly interest. The downside to deferring a loan is that your interest accrues. For some loans, such as those that are subsidized, the government may pay your interest. But most likely that interest will be a fun additional amount of money for you to pay off. So take the option of paying interest if you can.

You can request forbearance

Forbearance is really similar to a deferment, only it’s granted to you based on your lender’s discretion. During forbearance you’re interest also accrues and the government will not pay for it, no matter what type of loan it is. So I guess before you do anything, check to see what type of loan you have. If you have a subsidized loan, applying for deferment is a better option since interest won’t accrue. If you have an unsubsidized loan, it doesn’t really make a difference how you pause your loans.

You can make loan payments of any amount during deferment or forbearance periods if you are able to. Which brings me to my next piece of advice.

Pay off your loans as quickly as possible

Sure, you might be on a 12-year plan that seems swell, but you’ll end up forking over much more cash if you take 12 years to pay off your loans than if you take two years. Live on the cheap for a little longer. You’re probably already used to eating slightly expired foods and substituting Hulu for cable; why not prolong this lifestyle until you’re debt free?

Whatever you do, don’t default on your student loans. The government can do all sorts of things to you if this happens, most of which require you to pay even more money than you already owe. So get a grip on your finances and decide how to best handle this whole student loan situation.

If only Gatorade and an Advil would make student loans go away… that would be fantastic. Sadly, this college hangover doesn’t go away that easily.

Just because I’ve had my loans deferred once doesn’t mean I’m an expert. If you want to know more about this type of stuff this is a really helpful site. So is this. So… good luck with all that. Just remember that almost everyone is paying off some sort of loan, whether it’s from a car they just bought or from an education that isn’t aiding much in the job search. Chin up, friend!

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