Paying Off Your Student Loan (Before You're Old and Gray)

Congratulations! You did it! You finally graduated college! There's nothing more rewarding than walking down the aisle and being handed your college diploma. But now what? If you're like most students, that college education came at a price.

According to the U.S. Department of Education, 26% of college students borrow at least $25,000 dollars to pay for their college education, and that's in addition to credit card debt that financial planners estimate at ranging from $4,000 - $5,000.

And you wonder why so many college students suffer from anxiety?

Unfortunately, for many college students, borrowing money to pay for their education is as normal as joining a fraternity or cramming for finals.

If this sounds like you, then you're gonna need a lot more than just a cool website to help dig yourself out of the hole you're in. At least you have some decent resources to help. One of the more interesting is www.youcandoit.com -- a site designed to help college students become financially responsible.

So how exactly can you do it with YouCanDoIt? Here's the short list:

- Learn to Budget: Why most students wait until after they graduate to learn how to budget has to be one of life's great mysteries. But the fact is, you need a plan to monitor your expenses. A typical budget will include such categories as housing, food, utilities, transportation and entertainment. The smart money is on taking a cold, hard look on your spending habits for at least two months. Subtract your expenses from your take-home pay. Is there anything left over? Use it for an extra payment on your debt. You'll thank me later.

- Pay off Debts in a Timely Manner: Instead of graduating and immediately splurging on a new set of wheels or five new suits, use the money you have to pay off your debts. Your creditors will love you for it. If you can't seem to get a handle on making the payments because they are two high, then talk to your loan officer about lowering the payments or even deferment. You lose points in this silly game of life if you start paying for debts with your credit card.

- Consolidate the Debts You Have: It may be worthwhile to consolidate all your debts into one payment instead of stringing along several payments at the same time. Among other things, consolidation may result in a lower interest rate.

- Pay During the Grace Period: If you can make payments during your six-month grace period you can actually save money - as any payments you make will b applied to the principal balance. This in turn lowers the amount of interest you owe after the grace period ends.

- Use Direct Deposit: Direct Deposit takes the money automatically out of your paycheck and applies it to your loan. As we lean increasingly to a paperless bill-paying system, Direct Deposit makes sense. You can use DD for as many bills as you have. You'll also have a great idea how much you have left over.

The smart thing to do is to go into college with a plan that keeps your student loan from growing into a monster you can't control. If you have already eclipsed that opportunity, then at least learn what you can to deal with the debt you have waiting for you when you graduate.