College Connect: A Planning Tip When Preparing to Repay Your Student Loans

Posted By David Wilhite

By Kalah Mingo

Alexis Williams, a third-year public relations major, has an unpaid internship, but makes money and saves on dinner as a server at Olive Garden.

“I eat salad and breadsticks almost every night for dinner so it has its perks,” said Williams, who attends the University of Georgia.

Williams said she has concerns when it comes to budgeting and saving, especially when considering her student loans she’ll inevitably start repaying six months after graduation.

“I try to budget, but it’s a little harder as a server just because I don’t know what I’m going to make every week,” she said. “Like, last week I made $500 and this week I’ve made $15 so far.”

However, Brenda Cude, a professor and undergraduate coordinator in the department of financial planning, housing and consumer economics at the University of Georgia said students should not worry too much about saving for loan repayments while still in college. Instead, she recommends saving during those six months between graduation and when the first payment is due.

“For the first six months make the payment, but make it to yourself. It’s your buffer fund,” Cude said.

By utilizing this method, students can build six months of reserves for student loan payments in case something happens and funds are not available from their pay.

Williams thinks this a great method to start with, but her biggest fear is acquiring a job to pay for those loans.

“I will be $50K in debt when I get out of here,” she said. “I’m just scared about getting a job when I get out of school in that six-month period.”

Cude said that finding a first-year job that will pay at least the amount of your student loans is ideal. If it pays less it’ll be harder to manage the student loan payments.

“If I come out of college making $50K a year I would die happy, but also I’m not sure how realistic that is as a PR major,” Williams said.

If one hasn’t secured a job by the time the payments are due or finds themselves in a position in which it’s difficult to make payments, Cude recommends trying to defer the payments.

“Talk to the entity to whom you owe the money and ask if there are any options for that,” Cude suggested.

For those who are worried about saving for the future whether they have student loans or not, Cude said not to stress if one doesn’t have the income to save now.

“Every day when you go to class, when you do your homework, when you get a good grade, when you pass a course you are saving. You’re just not saving money. You’re building human capital. You’re increasing your earning potential in the future and that’s all some students can do,” Cude said. “Don’t beat yourself up for not saving significant amounts right now. Realize that you’re building the potential to save through your academics.”

So, if you don’t have enough to save or haven’t quite figured out a plan yet, don’t fret. You’re in college. You still have time to make mistakes and learn from them.

Kalah Mingo is a journalism major at the University of Georgia’s Grady College of Journalism and Mass Communication.


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