Some advice for new college graduates: avoid stretching out loan repayments
The speeches will soon be over. The caps and gowns put away. The one thing that won't go away is the student loans. For most graduates, the cost of their educations will be a reality.
So now what?
With unemployment continuing to climb and good-paying jobs hard to find, many recent graduates will be looking for refuge from their loans.
As debts go, student loans provide more built-in options to delay repayment than any other credit obligation. Borrowers can apply for a deferment or forbearance. They can extend their debt for as much as three decades or opt for graduated payments tied to how much they earn. And starting July 1, there is a new income-based repayment.
Graduates who suspect they will have trouble paying back their loans should immediately talk to their lenders. Your options vary depending on whether you have a federal or private student loan.
But can I give you some hard but well-meaning advice?
Instead of immediately opting for plans that will stretch your payments out until you're in middle age, try to find other ways to handle this debt.
I understand these are difficult times. Nonetheless start your payments as soon as possible, even if it means taking on a second job, or a roommate, or yes, dare I say, moving back home.
You could handle this debt if you delay going to graduate school, which would pile on more debt. An advanced degree doesn't guarantee a big salary.
Only after you've exhaustively scanned your budget and cut every possible expense (such as deleting the texting option on your cellphone) should you consider extended payments.
One of the most useful websites on repaying your student loan, if this is your last option, is www.finaid.org. Go to www.finaid.org/loans/repayment.phtml where you'll find an explanation of various repayment plans.
The following are some of your options under the federal loan program:
I've met a number of people who could have paid their loans under the standard period but because they didn't want to live frugally, saw their balances jump over the years. If you can't afford your payments, take advantage of the extra breathing room. But remember the more you delay, the more you may pay.
Michelle Singletary is a columnist for The Washington Post. She can be reached at singletarym@washpost.com. 
