How to Properly Manage Student Loan Debt

It’s usually pretty easy to get a student loan, and at first glance they seem like an excellent investment – after all a post-secondary degree can dramatically improve both career prospects and earning potential.

Borrowing money to get an education may be a good idea if you’re going into a high-paying, in-demand field like law or medicine, and have virtually guaranteed employment prospects upon graduation – in this case paying down your student loan debt shouldn’t be much of an issue. The Rule of Tens developed by Tim Cestnick is a pretty good guide as to what you’ll be paying on loans of various amounts. While they are significant, these payments should be relatively easy to reach, as long as you stay employed and stick to a sensible monthly budget.

But if you’re like the rest of the, unemployed and stuck with a degree in history, philosophy, fine arts or any other un-appreciated field, all the sage financial wisdom in the world isn’t going to help manage your student loan debt. You need a practical, no-nonsense plan to get the debt monkey off your back and get on with the rest of your life.

Get a job

It doesn’t matter whether or not you find employment in your field or not. It doesn’t matter whether or not you are earning a lot of money. It doesn’t matter whether or not you enjoy it – just get a job, any job, and get it fast, before you start missing payments.


If you’re still living like a student be prepared to stay that way for the foreseeable future, and if not, get ready to start living like a student again. This is not the time to buy new clothes, get a new vehicle (unless absolutely essential for work – and even then you should be buying something used) or start looking for a place of your own. Live your life as frugally as possible.


There is no greater financial obligation in your life right now than paying down your debt. As long as you are burdened with that debt your prospects for doing anything else with your life will be limited. So make your loan payment the first thing you take care of with every pay check, and then your rent, utilities and food. If you lose your apartment you can always move back home, but if you miss too many loan payments, you may never be able to repair your credit history.


One of the few good things about student loan debt is that unlike mortgages or other loans, many lenders will allow you to pay off large chunks of the principal (or even the entire loan) with little or no penalty. This means that the more money you can put towards your loan each month the faster you can get rid of it. If you sell your vehicle, cash in a government bond or get monetary gifts for birthdays and holidays, you can reduce your loan by hundreds or even thousands of dollars at a time.

Plan for the future

Paying off your student loan isn’t much fun, especially if you aren’t working in your field and you feel like going to school was the biggest mistake you ever made. But if you keep working and stay focused, then sooner or later your student debt will be gone. Plan for that day – plan what you’re going to do, where you’re going to go and how you’ll celebrate your hard-won student debt freedom.