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College Debts: Can They Ruin Your Finances?

By: Michael Millington

If you’ve read this title and heard a resounding “YES!” around the country, I wouldn’t blame you. College debts are steadily increasing while incomes are staying still or, in some cases, getting lower. Without a steady rise of available jobs that allow college graduates to make a living wage, debts will continue to eat away at whatever you make. In many cases, a college graduate will leave with thousands of dollars in debt without any way to start the repayment process at all. Let examine the ways that this particular type of debt puts you at a disadvantage.


Time Until Repayment

Many students only have a six-month grace period in order to start paying back student loans. Realistically, it isn’t a guarantee that any college student will be able to find employment within this time period. Without the on-the-job experience most employers seek, a number of graduates will be made to take unpaid internships. Many internships can lead to full time employment once completed (at the discretion of the employer of course) and many internships end at the three month mark. The ideal thing would be for all this to happen before you have to repay. Unfortunately, this isn’t always the case. The amount of individuals that end up owing loan money without having a suitable repayment method is, and will always be, too much.


Ways to Manage Student Loan Repayment

There are many ways to deal with student loan debt. The bad part is that none of these methods take debt away completely. You can shorten your overall repayment length. You can also adjust the amount of money you pay to your debt each month. One popular way of altering your payments is by taking into account your income. Instead of your payments depending on the amount you owe, your payments will be based on how much you make. This can help to mitigate the pressure of student loan debt for a while, but not to erase it. Lower amounts of debt payments might only push back your completion date a decade or two. 



Debts have interest. Just like most credit cards, personal loans, and other creditor approved items, student loans will accrue interest over time. Think of interest as the fine you pay for having debt in the first place. No matter what, interest will accrue on your debts. If you have absolutely no way to make a payment on your debts, interest will accrue. Student loans never go away until they’re paid off. Ideally, if you pay off your loans quickly, interest shouldn’t impact your finances too much. But this can’t happen when monthly student loan payments are gargantuan. As reported in a recent piece by, there are multiple states where made money doesn’t go as far as it should. The amount of unknown factors that lend to student loan debt becoming a problem can build to be overwhelming.