Coping with College Debt

If you’re like me, you owe a mortgage in student loan debt! Don’t despair – you didn’t do anything wrong. For generations, we’ve been taught that if you go to college and work hard, you will achieve the American Dream. Naturally, ambition and self-motivation are two necessary variables in that equation but nonetheless, we’ve all been taught the same mantra.

According to a recent report from the Institute for College Access and Success, the average amount of student loan debt has grown to $30,000. When a student is granted a student loan, they are sometimes given the option of accepting the full, awarded amount (could be up to 4x that of tuition) or a partial amount. If you’ve made this mistake, you know where I’m going with this.

Tip #1: Accept ONLY what you need. Accepting more than what you actually need to pay your tuition can lead to unintended negative consequences. Don’t use your student loans to subsidize your income. I realize this is an afterthought for many of us, but share this advice with every single parent of a teenager you know!

Tip #2: If you have federal loans, you have many options to repay the debt that might be conducive to your current financial situation. You can review them here: There are also many loan forgiveness programs out there. Working in public service has many benefits and loan forgiveness is a huge one!

Tip #3: Take a financial picture! Where do you see the highest interest rate? Take that debt and pay it off first. Once you pay off a debt whether it’s a credit card, loan, car, etc., take what you would usually pay towards it and pay down your student loans. Depending on when you received your federal loan, you might have a fairly high interest rate. In many cases, it may be higher than your car or mortgage loan.

Tip #4: Budget! You will have to live on a budget and may have to do without some of the finer things in life but it’s a temporary situation and once you’re debt-free, you’ll be able to spend more on things you want. If you receive a bonus at work, use that money and throw it to the loans! You didn’t depend on it anyway, right?

Tip #5: Be wary of debt consolidation. It might be worth it for you to consolidate your student loans. It might not. Consolidating can lower your monthly payment but your loan term might extend. If you think this might be a viable option for you, contact your loan servicer and be sure to do the math. You want to know if you’ll end up paying more overall and if so, how much?

Tip #6: Taxes could be fun! Tax season is most definitely not a fun time for many people; it’s probably on par with an arctic blast in the Cayman Islands! However, you could receive tax benefits for paying your student loans! You should contact a tax consultant to determine if your payments are tax deductible. You can also find more information here:

Tip #7: Many companies offer tuition reimbursement to their employees. Ask your employer if you could use that program to help pay some of your student loan debt. What’s the worst thing that could happen? They will tell you ‘no’. If they say ‘yes,’ life got that much better!

Tip #8: Keep Calm and Pay On. Easier said than done? Well, yes. By no means should you regret going to college regardless of your college student debt. Education is the only asset that no one can ever take from you. Do your best to make a dent in the debt and pay on time. Your credit will thank you.

Finally, and most importantly, DO NOT ignore your debt. Many times, if you just share whatever hardship you’re facing, the debt servicer will be sympathetic and provide you with many options to stay current. The last thing you want is your debt servicer contacting your employer to garnish your wages! It happens. You don’t want it happening to you.

Jennifer M. Leighton-Guzman has worked in the non-profit world for many years and currently works for Texas Capital Bank in community development.


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