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June 28, 2019

Even Presidential Candidates Have Student Debt

Even if student loans feel like piles of wood on you, you can be a smart borrower.

When student debt piles on, learn some tips to be a smart borrower.

When student debt piles on, learn some tips to be a smart borrower.

For most people, taking out student loans is the first debt in their own name. Knowing that you are taking out debt that you are supposed to pay back can be daunting, especially because typically you don’t have an income to support repayment for years. If you are that person who is breaking out in a cold sweat, just remember you will be like one more than 44 million student loan borrowers in the United States with student loans. In fact, you may have even heard that Pete Buttigieg, Democratic candidate for the 2020 elections, and his husband have a ton of student loans. Plus, people like actors Kerry Washington from “Scandal” and Jon Hamm from “Mad Men” have discussed taking out loans. Rapper Dee-1 even wrote a song about the experience of having a student loan.

Hopefully, you can take heart that you are not a lonely student loan borrower. Instead reflect on the fact that most likely one out of ten people on your block most likely have student loans.

Knowing it is a common experience to be a borrower, turn that concerns into action to become the most successful borrower that you can be with these 6 great tips:

1. Maximize your free money first. Make certain that you have applied for every bit of institutional aid possible by reading and applying for what is available in federal, state, and institutional need-based aid and merit-based, Plus, use a scholarship search to research and them complete the process for funds from corporations, membership groups, and other non-profits.

2. Stretch your budget so you can use some present-day dollars. If you are working while going to school, can you use some of your income to pay for books, health insurance, transportation costs, or other educational expenses. Using income to pay expenses means you borrow less.

3. Assess if you still need all the funds just before or after a disbursement. Typically, student loans allow you to ask to reduce your loan without benefit even up to the fourteen days after electronic disbursement. This means that if you can decline all or a portion of your loans and reduce your total student debt.

4. Make interest-only payments for unsubsidized loans. If you borrowed the Direct Loan annual maximum for your first year, this could be about $12 in your interest-only first semester. Even if you can’t keep pass to make the entire interest-only payment by your fourth year of borrowing, you will be cutting down the total cost of financing.

5. Start making payments in your grace period. Maybe you can use some or all of that graduation cash your aunt and uncle sent to pay some of that accrued interest on your unsubsidized loans. Perhaps you can be knocking down the principal directly if you already have a job and can make what will be your new minimum payment.

6. Add additional funds to your minimum student loan monthly payment when you can. If you get a raise, consider figuring out what that turns into after taxes and decide what percentage of it can be used for paying down debt.


Photograph of Colleen Krumwiede
Colleen Krumwiede
Co-Founder & Chief Revenue Officer

Colleen MacDonald Krumwiede is a financial aid expert after over a decade of financial aid experience at Stanford GSB, Caltech, and Pomona College and another decade at educational finance and technology companies servicing higher education.  She guides go-to-market strategy and product development at Pay4 to transform the way families afford college.


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