Many residents of Wisconsin who graduate from college do so with an enormous amount of debt. According to Fidelity, 70 percent of people who graduate nationally in the year 2013 have an average of $35,200 of debt. Additionally, in spite of the fact that the cost of college loans has gotten a lot of attention recently, 50 percent of the 2013 class who have student loans are surprised by how much debt they have accumulated.
In addition to student loans, many young people also have a sizable amount of credit card debt, and it is important that they have a plan of action for paying off these loans. Two ways that recent graduates can help keep their debt under control are to create a budget and prioritize their debts. Creating a budget can help young adults manage their money and ensure that they are living within their means while still making progress on eliminating their debt.
It is also a good idea for recent graduates to focus on certain loans instead of simply paying the minimum balance to creditors. There are two schools of thought on this matter. One way to handle debt is to tackle the smallest debts first so that people feel they are making progress. Once smaller loans are paid off, funds can be diverted to the next largest loan. The other idea is to go after loans with the highest interest rates. This can help reduce the total amount people have to pay to get out of debt.
If people are in deep enough debt, they may not realistically be able to pay back their creditors. In this case, a lawyer could help them understand how filing for bankruptcy could help them get back on their feet.
Source: Fox Business, “How grads should prioritize their debt repayment”, Emily Driscoll, July 15, 2013
