Avoiding the Post-Graduate Depression of Student Loans

I’m so excited to share today’s guest post! Dan and I met online through Rockstar Directory, and he has some great recommendations for making student loans a more positive experience. Enjoy!

By Dan from dinks.co; he’s a new blogger looking to make his mark on personal finance.

Earning a college degree is a perceived necessity in today’s economic environment. Individuals who invest in a college education are more likely to secure a higher paying job and have a career trajectory that provides for a financially stable life. However, the investment required for a college degree increases each year, incentivizing millions of students to take on student loan debt to fund their education.

Student loans currently account for more than $1.4 trillion owed, and recent graduates make up the majority of borrowers given the increased cost of attending college. While student loans are a means to an end, they can and often do create a sense of overwhelming dread for new graduates. It shouldn’t be surprising; it’s already no secret that money is stressful.

Many individuals take on tens of thousands to complete a degree program, but without the right level of know-how on repayment and money management, borrowers are prone to mismanage their student debt right out of the gate. Not understanding where student loan balances and minimum payment requirements can be found, misunderstanding income-driven repayment options, or failing to recognize the power of compounding interest among others all lead to stress that can be difficult to overcome.

To avoid these negative consequences, it is helpful to understand what can be done to manage loan balances and repayment after graduation effectively. In other words, it pays to know how to pay down your debt. It sounds like a simple solution, but there are a few ways to make it easier. Here are several strategies to ease the overwhelm associated with student loans after graduation.

Breaking up Payments

Some of the stress that comes with repaying student debt is the substantial amount due each month. For new graduates who are just starting their career, making a several hundred-dollar payment each month can be difficult to manage on an entry-level salary. One method to reduce the burden is to break payments up into more manageable pieces.

Some student loan borrowers opt for bi-weekly (or twice per month) payments which can be aligned with the borrower’s pay schedule. While an auto pay option might not be available, borrowers can easily allocate half of the payment manually through their student loan servicers. Taking this small step eases cash flow every two weeks. On top of this, keeping to a strict bi-weekly schedule actually adds an additional payment on the year compared to making two payments a month.

Private Student Loan Consolidation

Student loan borrowers often end up with multiple loans after graduation which can be a challenge to manage. Adding to the frustration and confusion is the fact that each loan may have a different interest rate than the next. Consolidating student loan debt through a private lender may be a solution for those who want a simplified loan and a potentially lower interest rate. There are a few caveats to this process, but there are also potentially rewarding benefits.

Private student loan lenders offer a range of options for borrowers who have a strong credit history, a stable employment record or job offer, or a co-signer with these attributes. They may be able to provide a lower cost via a fixed or variable interest rate, or more manageable repayment plans that extend out longer than the standard repayment plan for federal loans. This is a great way to save money on student debt, but it is characteristically hard to qualify for. Private lenders hold applicants to a strict underwriting standard, and new graduates with inexperience may have a hard time qualifying.

student loans


Borrowers who have federal student loan debt or certain private student loan lenders may have an option for deferring their minimum monthly payments for a period of time. Deferment simply allows a borrower to stop making payments for several months at a time without going into default. This can be a great help to someone who’s facing unexpected financial obligations.

However, a deferred federal or private student loan may still accrue interest. This means borrowers could end up owing more than they started with, making it necessary to consider the consequences before requesting a deferment in the first place. Aside from this, student loan deferment is still an option for anyone looking to get a sigh of relief during repayment.

Income-Driven Repayment Options

If the monthly payment on a federal student loan is too much to manage, then there are several options for income-driven payment plans that can help ease the burden. Income-driven repayment (IDR) plans limit a borrower’s monthly payment to a percentage of discretionary income, either 10 or 15%, making payments more manageable.

It is important to note that income-driven repayment plans may be eligible for future forgiveness after 20 or 25 years, but this creates a tax liability in the year the loan balance is wiped clean. Also, these repayment plan options still accrue interest, meaning borrowers could owe far more than they originally took out. However, it is equally important to note that the prospect of student loan forgiveness via IDR is dwindling under the current government administration; this forgiveness program may be cancelled officially soon. Despite this, IDR plans are still a viable way to reduce monthly payments into a more manageable obligation.


Exiting college into the real world is a challenging transition all on its own. When you throw in the beginning of student loan repayment, it gets all the more troublesome. While this can drag any recent graduate down, it’s important to understand that you have options to choose from. These options will help you navigate your student loan debt as well as come to terms with your monthly obligations. Handling student loan debt doesn’t have to be depressing, but it can certainly be a valuable learning experience.

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