Graduates Focus on Debt Relief as They Transition into Jobs

Recent college graduates

(Photo courtesy of

(Photo courtesy of

Most recent college graduates focus on debt relief as they move into the workplace. Gone are the days of accumulating credit later in life and almost every college graduate has some type of debt to deal with.

Whether it’s student loans, car loans, or credit cards, students need to focus on their credit-building plans. With Visa, MasterCard, and Discover all catering to college students as their future market, students are inundated with offers of special deals to secure their business for many years to come.

Paying down debt

The first thing all graduates should focus on is getting out from under unnecessary debt. Sure, that credit card deal sounds great, but the bottom line is that credit card companies are out to make money. Whether that comes in the form of fees, charges, or penalties, they are set up to reap as much benefit from each customer’s purchases as they can. Young adults need to pay down debt as soon as possible.

Ways to manage

There are a wide variety of ways to pay down debt. Smaller apartments, living with parents for a longer period of time, or getting a roommate can maximize funds for paying down debt. Using public transportation rather than buying a car immediately after graduation may be another solution. There are many different ways to cut back on living expenses.

Another area to look at is credit card balances. If graduates find they have large credit card balances, they can look into switching to lower-interest cards. Existing balances can be transferred to these cards and resulting monthly savings can be applied to paying down debt. Again, in today’s economy, debt relief should be a priority for every student attempting to manage a budget.

Student loans

For qualifying graduates, student loan payments can be reduced under many different programs. The Federal Direct Consolidation Loan program can give information on what can be done to change payments. Many students qualify for these types of student loan repayment programs, and the monthly savings can be significant. The programs can lengthen loan terms, reduce payments, and in some cases, even forgive portions of loan balances.


Graduates should pay attention to insurance needs, also. Health insurance is important. Uninsured medical expenses due to illness or accident can cause long-term financial disasters. Many employers offer health insurance, but graduates should be sure to understand the terms of their coverage; and if the coverage is inadequate, they should attempt to find better coverage on their own by calling major insurers for their location.

Graduates should also consider life and disability insurance. Although life insurance is most logical for graduates with dependents, disability insurance is important for everyone. Disability insurance will replace a portion of a worker’s income should he or she be unable to work for an extended period of time due to illness or injury. If an employer doesn’t offer this type of insurance, workers should call companies to compare rates.

A cash reserve

Graduates need to understand the importance of saving. Putting money away, in addition to working on debt relief, can make their financial futures secure. The traditional rule of thumb has been to maintain between three and six months of normal living expenses in savings. But given the current recession, six to nine months of expenses is a more realistic amount to cover emergencies and possible periods of unemployment or income reduction.

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