Graduation is a milestone in every student’s life.
It is a time to celebrate accomplishments, reflect on memories, and look towards the adventures that await.
For many university graduates, however, it also means it is time to begin paying back the student loans they have acquired throughout their education.
The process of repaying debt can be especially difficult for recent grads with more than one form of loan.
“Students with both government and private student loans graduate with an average of $37,000 in student debt upon completion of a four-year bachelor degree,” according to the Canadian Federation of Students.
Fortunately, there are many resources students can use to get advice as well as financial assistance in order to help pay back multiple loans.
Michael McIntyre, a financial expert at Carleton University, provided the following advice for students attempting to pay back their debt:
● If possible, use a loan with a low interest rate to pay off one with a higher rate.
For example, a student line of credit could be used to pay off credit card debt to reduce the amount of total interest paid on the loans.
● Try not to borrow back money from a debt that has already been paid off.
● Set realistic, achievable goals for paying debt. Being too aggressive too soon can lead to disappointment and frustration.
● Keep track of spending to understand where money could be saved and used towards paying off a loan.
The Ontario Student Assistance Program gives new graduates a six month “grace period” during which they are not charged any interest on their loan. The program, along with many banks, also offers modified repayment terms for those in a desperate financial situation.
Students who are motivated and use available resources to repay their loans one by one will be rewarded in the end.
“If you treat loans responsibly, you will build a good credit,” says McIntyre.