Categories: Student Loans

Strategies for Handling Student Loan Debt and Planning for Your Future

If you’re like the average graduate, you owe thousands of dollars in student loans. And once you enter the professional world, your primary goal will be to get on your feet. Thoughts of the future are probably the last thing on your mind, and if that’s the case, you’re not alone. CNBC reports that millenials are among the least likely to plan for their futures and the most likely to get shortchanged on their retirement plans. You probably know this in the back of your head, but that knowledge does you no good if you don’t have a plan for handling it.

EVERY LITTLE BIT COUNTS FOR YOUR FUTURE, NOT JUST STUDENT LOAN DEBT

Setting aside $500 or $1000 a month might be ideal for preparing for your future, but it might not be possible. Graduates should make savings and retirement plans as much of a priority as possible. Even $25 will add up eventually. One of the easiest solutions is to set it aside in a separate account where you can’t touch it. You can also set up a retirement account. But be cautious about your contributions. You can receive certain tax benefits, though the IRS refuses to provide tax credits for contributions in excess of $5,500.

Minimize Your Monthly Payments

You shouldn’t wait until your student loans are paid off to start preparing for your future. When you get your first paycheck, you should set aside a portion to put into your savings just as you set aside some for your student loan payments. But remember that your current payment plan may not be the best one for you. When you graduate, you will generally be enrolled in the standard repayment plan, which will set you up to be paid off in 10 years. But there are many other available options for federal loans including

  • Income based repayment plans
  • Graduated loan repayment plans
  • Extended loan repayment plans
  • Pay as you earn repayment plans
  • Income contingent repayment plans
  • Income sensitive repayment plans

The differences between these plans can be subtle, and some of the biggest distinctions can be seen in the interest accumulated and the frequency of required payments. In some cases, you may even be able to consolidate your student loans to further simplify your financial situation. You will almost always pay more in interest, but on the plus side, you will be able to put more away in savings. Even if you do wind up paying more in interest, it’s better to pay that extra interest while saving for your future.

It can be overwhelming to look at all the financial obligations you now have. Instead of pushing ahead and trying to pay off your student loan debt, you need to start preparing for your future now. Even small amounts set back and stuck into savings will add up and make a difference. You can also free up more of your income by looking into various repayment plans or consolidation.


Determining the best solution for you can be challenging, but you don’t have to do it alone. Consider speaking with an attorney at the Van Horn Law Group for further guidance.

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Published by
Chad Van Horn

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