6 Tips For Handling Student Loan, Credit Card Debt

It’s been a slow dance, but the presidential hopefuls, along with the media, are finally beginning to address the next financial storm that’s brewing. Student loan debt plus credit card debt equals an entire generation of graduating college students who are about to face the stark reality of not being able to make ends meet.

As many have already heart, the average college student is walking out of their collegiate halls not only with their diploma, but $25,000 in student loans, around $3,000 in credit card debt and very slim pickings in the job market. The problem is only getting worse and, of course, our elected officials are worse than a bunch of two year old toddlers fiercely protecting their tricycles.

We’ve checked with all the experts and asked them what advice they’d give these graduates if they had the opportunity. Here’s what we found.

Better Budgeting

One recent graduate we spoke to has been prepared for tough times her entire life.

My dad was a teacher for thirty-plus years, so I’m used to living within a budget and have developed the mentality of saving more and spending less.

Unfortunately, that’s not always the case. Still, for those who can rein in their spending – even on the little things – they’re going to find themselves a lot better off in the long run.

Healthy Reality

Determine what’s important and then keep a healthy dose of reality in your buying decisions. If you’re like most college students, you’ve already learned a lot about prioritizing when it comes to money. One common theme we discovered was the ‘can’t budget money you don’t have’ mentality. Keep in mind, though, tough times are always temporary and the steps you take now will only serve you well once your credit card debt and student loans are in your rearview window.

Maintain Payments

Keep making payments on your credit cards and student loans. This might mean taking whatever job you can until you’re able to land in your chosen career choice. Before you adopt the mentality of

I didn’t kill myself for four years earning a degree only to work in a low paying job,

keep in mind that part of being an adult is doing things we don’t want to do. Take pride in whatever job you’re doing. Keep your eye on the ball, stay committed to your financial commitments and don’t look back. Things have a way of coming full circle when we’re doing our part. Not sure how to budget your incoming versus outgoing finances? Ask for help. Whether it’s a parent or your best friend’s dad who’s the vice president at the local bank, seek out that advice.

Contractual Terms

Have any idea what kind of repayment plans are available for paying back student loans? If you don’t, now’s the time to find out. Don’t assume what you’re boxed into is a prison; there’s a good chance there are better repayment plans if you’ll only ask. From graduated payment plans to revised payment schedules based on your income (which are different, contrary to what many believe), check out the available programs.

Same things goes for your credit cards. Don’t just stop making payments. Contact the credit card company and seek out win-win solutions that will keep damage to your credit scores low while also maintaining your commitment. And stop using your credit card for anything other than absolute emergencies! Understand this: you’re not the only person facing these problems. Many young adults are in the same boat as you. This means your credit card company is likely already a step ahead and prepared to extend different options for folks in similar situations. You won’t know, though, unless you ask.


Prioritize your accounts. It makes sense to focus on your high interest accounts first. Any extra money coming in should be applied to those accounts and as you pay one account off, turn your attention to the next account. Most student credit cards have considerably higher interest rates, so it’s especially important in these situations.


Finally, you might wish to consolidate your obligations. While it’s nearly impossible to include student loans in any type of bankruptcy, you can consolidate your student loans, credit card accounts and even your car loans into one account that’s easier to maintain. Keep in mind that you might need a co-signer, especially if you’ve only recently landed a job. There are likely going to be more stipulations, but at least you will know where you stand.

The key is to leave no stone unturned. Keep your focus, have faith and work hard so that you don’t become your own worst enemy. If you’re overwhelmed, ask for help. Confide in a trusted friend or family member and never underestimate the power of patience. Remember – there are no solid solutions coming out of Washington these days, so until that happens, it’s up to each of us to define our own financial solutions.

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