Relief for the Student-Loan Hangover

This May college students across the U.S. are hearing motivational messages from commencement speakers about how to be successful in the “real world.” What they’re probably not hearing is that their 2015 class holds a special distinction: it’s the most indebted class in history, according to, graduating with $56 billion in student loan debt.

According to Edvisors, a financial aid information website, the average class of 2015 borrower will graduate with just over $35,000 in debt.

“Higher education is more expensive than ever before and it’s also more important,” says Heather Jarvis, a Duke University School of Law graduate, who provides educational resources and training for student loan borrowers. “Our economy rewards those with a college education and therefore students and their families are stretching themselves to get the education they need.”

Jarvis, who faced $1,200 monthly loan payments after law school, suggests the following tips for students to get a grip on their loans after graduation:

Get a clear inventory of all you’ve borrowed: You can get a complete listing of your borrowed loans, along with information about how much you owe, terms of each loan, and who you must repay. For a complete listing of the federally guaranteed loans you have borrowed, visit the National Student Loan Data System (NSLDS) at For private student loans you’ve borrowed, get a free copy of your credit report from, where your student loans will be listed with information on the lender/servicer of the loan.

Know when your first payments are due: Most federal student loans have a six-month grace period before payments are required, while some private student loans don’t have grace periods at all. Be sure to know when payments are due because missing one could negatively affect your credit score.

Update your contact information with lenders: It’s important that your student loan servicers are able to reach you with student loan payment information. Update your email, address and phone number with your lenders so you receive the information you need.

Select a payment plan and stay on track: Even if you don’t have a job following graduation, try not to defer your loans, as there are numerous repayment plan options available. Income-driven repayment plans are available for federal loans and they often offer loan forgiveness over time. Whether the loan is federal or private, contact your lender to determine your available options for repayment.

Know your interest rates:  Different loans will have different interest rates. Find out what those interest rates are and try to pay the loans with the higher interest rates off first. Also, if you can afford it, pay a higher monthly payment to help you save money in the long run. Finally, check if consolidating is right for you, but be careful not to lose out on the federal loan benefits by turning them into private loans. Overall, be conscious how you manage your debt, so it doesn’t cost more than it should.

If you're a recent college grad with debt, don't feel alone. A recent study by the Federal Reserve Bank of New York found that debt from student loans for higher education is now the largest category of debt in the U.S., with over 43 million borrowers owing cumulative total debt of $1.2 trillion in federal and private student loans.

This staggering figure comes as no surprise to Somerville, N.J.-based CPA and Personal Financial Specialist Mark Mauro who holds eight to ten seminars each year for parents trying to determine how to foot the college bill. Mauro, who is also a Certified College Planning Specialist, says one out of every 20 of his clients are able to pay for their child’s college tuition, while the other 19 are taking out some type of loan.

“It’s best to start saving for a child’s college education the day they are born,” says Mauro. “You would have to put away approximately $600 per month in a college savings plan from the time your children are born to cover the entire cost of a four-year public college.”

Mauro warns that “deferring college loans is a very expensive compromise.” He suggests that students start paying their loans off immediately after graduation, but to do it gradually. “Start with the normal payments, and as your career and income progress, begin increasing the amount.”

Finally, Mauro warns students not to forget about saving for retirement when juggling student loan payments.

“Saving for retirement is a much better use of money. The college loans will eventually get paid off, but the earlier you start saving for retirement, the wealthier you will be in the long-run,” he said.