By continuing your education and going to graduate school, you have made a great investment in your future. Now, you will be able to land the dream job and make a real difference in the world. However, that willingness to succeed will also impact your bank account, and if you don’t have a job lined up after you complete your program, then you may find yourself saddled with graduate loans without the income to pay it back.
If this is your situation, then try not to panic. We have some tips on how to manage the repayment process during this space between graduation and employment.
Understand The Situation
Since you can’t predict the future, it is a wise idea to prepare for the fact that you may not have a job immediately after completing graduate school. It is also important to realize that going to school will be a very costly endeavor, and that is because as time goes on, there is an increased demand for college degrees both by students and businesses. That is great, except that many schools now have less government funding but greater administrative costs so colleges need to raise their tuition prices.
With that in mind, it is a good idea to create a detailed strategy for how you plan to pay for school. If you are just counting on student loans, then you will owe a lot. However, there are other avenues you can take, including securing a fellowship, which is a grant that will often cover the cost of tuition. You could also look into scholarships and military benefits if you served before school.
Of course, the other option is to find a less expensive school to attend. When applying to colleges, take a close look at the costs and determine ahead of time how much you will owe once you graduate and if you can properly tackle that debt. Typically, you can go to an in-state school and get a better deal with the same great education.
Repaying After Graduation
As mentioned, even if you plan every cent, you are still likely to have loans to pay back once you graduate. However, if you are smart with your money both during and after college, you can have more money set aside to pay back your loans. A detailed budget is essential when it comes to money management.
When creating a budget, you must account for every expense that you pay every month. In addition to your school loan payment, you should also account for your groceries, utility bills, and your entertainment costs. Then, compare that to how much you are earning every month. If you have no income and you are only using your loans, then you will want to be frugal. Think about expenses you can cut out like coffee runs or the streaming service you never watch. You may also have to sacrifice time out with your friends or do something more meaningful, like study at the library together.
After you have graduated, if you haven’t yet found the ideal career, then you can at least find a side hustle that will bring in money while you apply for jobs. A freelance job could include driving for a food service, or you could find a gig that aligns with your degree. So, if you graduated intending to become a professor, then you could tutor students online.
Programs are Available
If you have recently graduated and you are worried about repayment, especially in the current uncertain world climate, then this is a good time to research some programs and benefits that may be available to you. For instance, in light of the struggles associated with COVID-19, President Biden recently extended the pause on student loan repayments until May of 2022, which gives you more time to get your financial affairs in order.
You may also have the option to switch up your repayment plan from the standard 10-year option to an income-driven payment plan, which takes into account your family size and how much money you have coming in right now. You’ll need to do some research to ensure that you meet the requirements. You can ask those questions and apply via the student loan government website.
In the case that you are already working when you choose to enroll in graduate school, ask your current employer if they offer tuition reimbursement. Many jobs will help with your education, especially if your degree will end up helping the company in some way. Keep in mind you will need to stay employed at that company as you go to your classes to get the benefit.
In the end, there is no getting around the fact that graduate school is going to cost money, but with smart strategies, like those listed here, you can keep your payments manageable.