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Jill On Money: Financial advice for college grads

Jill Schlesinger on

With campus protests grabbing the headlines, it’s easy to lose sight of an important fact: About 4 million Americans will graduate from college this year and for them, life is about to become more complicated.

The good news is that a robust labor market has provided many with well-paying jobs.

The median annual wage for recent college graduates aged 22 to 27 was $60,000 last year, according to the Federal Reserve of New York. That’s a big jump up from the $36,000 that high school grads earn.

The bad news is that over half of college grads will be leaving school with student loans.

For them, the first to-do item is to drill down and detail what is owed, the interest rate associated with each loan, the monthly payment amount, and when the first payment is due.

If you have a federal loan, all of this information can be found at studentaid.gov, but if you have a private loan, you will need to contact that lender directly.

 

There’s usually a grace period of 6 to 9 months, during which you are not required to make payments, but since the interest clock is ticking, start as soon as possible so you can whittle down the outstanding balance quickly.

To ensure that you don’t miss a payment, establish an automatic draft from a bank account. If you can’t make the monthly payment on a federal loan, consider an income-driven repayment plan, which can reduce the monthly amount by extending the period of time you have to repay the loan.

Whether or not you owe money, you will need to track where your money is going.

This is an easier task than creating a budget that often feels more like an aspirational document, not a realistic plan of action.

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