Debt: The first hurdle for new grads

Many new graduates have more to worry about than “finding a job in a slow-growing economy,” said Alex Veiga in the Associated Press. They also have to face up to the first payment due date on their portion of the nation’s $1 trillion in student debt. Federal and private loans give borrowers a six-month grace period before they have to start paying, “but eventually the bill will come due, and it won’t be insignificant.” TransUnion, the credit-reporting bureau, said in January that the average student loan debt soared 30 percent between 2007 and 2012. If you’re putting on a cap and gown this spring, be prepared. Be sure you understand the terms of your loans and your repayment options. If you can’t afford your federal loan payments, look into a deferment, which will allow you to temporarily put off making payments. And if you’re trying to get a leg up on a number of different debts, consider a loan consolidation that leaves you with only one monthly payment.

Even if you feel completely buried under student debt, there’s probably a way out, said Constantine von Hoffman in CBSNews.com. The government’s Income Based Repayment plan “caps the amount being paid each month at 15 percent of discretionary income.” If that isn’t enough to cover interest payments, the government will pay them (but not the principal) “for up to three years on many types of loans.” Yet the number of people defaulting on student loans continues to soar, largely because they’ve never been informed about such options. “People think they’re stuck in default when they’re really not,” said Joshua Cohen, a lawyer specializing in student debt.

Ultimately, you need an income to repay your loans, said Corinne Mills in The Independent (U.K.). And “the job market is a little tricky for new graduates at the moment.” Still, it’s not impossible. It helps to have internships or work experience under your belt, of course, but the few paid internships available “are extremely competitive and highly sought-after.” As painful as it is, if you lack experience and can afford it, an unpaid internship “may well be worth your time.” But there’s more that you can do. If you’ve sent out hundreds of applications and haven’t heard back, pick up the phone and call. That makes you stand out “from all the other candidates who have just emailed their applications and done nothing proactive thereafter.” Getting a job these days requires a certain shamelessness: Call in favors from family or friends, reach out to companies on Twitter, and “network wherever you can.”

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