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Student Debt Overview

By Rachel Solomon
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  1. Generation Debt – In 2007, 42% of college graduates left school with over $25,000 in student loans to pay off, while another 33 percent have a credit card
    balance of more than $5,000. You are not alone.
  2. See where you stand – Before you can do anything about your debt, you need to know how much you have. Check in with the National Student Loan Data System, and then follow up with each individual lender.
  3. Take advantage of your grace period – There is a six-month period when your lenders give you a reprieve from paying back any debt. Don’t let this time pass without confronting your debt situation.
  4. Avoid credit cards – Transferring your loans to a credit card is extremely risky. You will suffer from uncompetitive interest rates and risk decimating your credit.
  5. Know your options – Even if you have a vague plan of action, it’s worth reading through all of our articles on debt to ensure that you make the best choice. The more you know…

We all have those sobering slaps to the face when starting our post-grad lives, and I can still feel the sting of my first. It occurred when I nonchalantly opened a letter from a beloved little bank I’ll call "Broken Noses Consolidated." It read, in so many words

Student Debt Consolidation

By Rachel Solomon
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  1. The pros – Check it: consolidation combines all of your separate student loans into one streamlined loan, fixes the interest rate, reduces the risk of late payments, and can stretch out the repayment schedule (thereby reducing your monthly payments).
  2. The cons – By stretching out the life of your loan, you end up paying more interest than you would have on the original schedule. How much more? Sometimes up to three times as much!
  3. Holler at Uncle Sam – If you have federal loans (e.g., Stafford, PLUS), you’ll want to explore what type of consolidation plans you can find through the government. The credit crunch has tightened up the consolidation market, so this is where you’re most likely to get the best interest rates.
  4. Pick a payment plan – There are a number of options for payment schedules, so take some time to figure out how money you have and how much you plan to make in both the short term and long term.
  5. Got private loans? – Check out our article on private debt consolidation.

According to MonsterTrak’s Annual Entry-Level Job Outlook, almost half of the 2007 graduating class had $25,000+ in student loans when they left school. There's no way to sugar-coat it: that's a pretty harsh "welcome into the real world" moment, and it helps explains why more and more reason grads are opting to shack up with mom and dad so they can save up money and pay off their debts.

Blowing Up Your Savings

By Christopher Schonberger
3/25/08
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If you thought that saving money as a recent grad was annoying, at least your debit card doesn’t explode into tiny pieces when you fail to deposit enough money in your account. That, in essence, is the idea behind the “Savings Bomb,” a new Japanese piggy bank that

Travel Like a Ninja: Going International in Five Days or Less

By Julia Bonnheim
12/11/07
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Coming to terms with the working world’s painfully small amount of vacation time has been an extremely difficult task. After being cruelly conditioned to an academic life of built-in vacations, a paltry 15 days of time off is almost unfathomable

Cyber Monday!

By Christopher Schonberger
12/11/07
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Thanksgiving is over and shopping spree season has returned. I don’t know too much about the economy, but it’s hard to believe there’s a looming recession when you watch hordes of grubby middle-aged women claw at bargain bins and fill shopping carts with complete crap

Investing in 401(k)s and IRAs

By Christopher Stella
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  1. Think ahead – Investing in a 401(k) is something every recent grad should do, but very few head these words of wisdom. A 401(k) allows you to defer (or invest) a portion of you income, pre-tax, to you retirement plan. It's a sweet deal later on down the road.
  2. Do it yourself – If you're employer does not offer a 401(k) plan, set up your own IRA. It's a retirement plan that you invest in yourself, and there are many different plans with a variety of investment options.
  3. Start early – Open a 401(k) or IRA as soon as you start your first job after graduation. If your employer doesn't offer one, contribute to an IRA earlier in the year to take advantage of more months of interest.
  4. Shop around - Some IRA companies may charge fees to maintain your account, or to switch providers. Do some comparison shopping before you choose your account.
  5. Be Comfortable – Don't go into credit card debt trying to save for the future. But if you can, you should at least contribute up the maximum company match. Anything less is literally throwing away free money.

So it’s the first day of work and HR asks whether or not you want to open up a 401(k) retirement account. “Heaven’s to Betsy” you say in your most petulant grandfatherly voice: why the hell do I need a retirement account? Ahh…so you say that now. But what happens when you’re 50 years old and realize that

Picking the Right Credit Card

By David Pekema
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  1. Abuse your student status – If you're still in college, take advantage of the credit cards that literally get thrown at your feet and keep one after you graduate. You're entitled to a card for two years, so grabbing one before the pomp and circumstance will be a huge boon once you become a marked man (i.e., recent grad).
  2. Beg your bank – If you don't have a credit card left over from your college years, the easiest way to get one is to inquire with your bank. All the major banks offer a huge number of credit cards, and hopefully you've been a loyal customer.
  3. Pick a card – Think about which card best fits your requirements. A low interest card is good for those who simply want to make the minimum payment every month (though this is a terrible idea). For people who make a lot of purchases, the reward/cash back card is the gift that keeps on giving back every time you buy something using the card.
  4. Mileage cards – These are worth the annual fee for frequent travelers. Every time you charge a purchase, you get miles and you can redeem them for airline tickets.
  5. Don't go overboard – The fewer credit cards you apply for the better. Applying for numerous credit cards in a short period of time can adversely affect your credit score.

As the average graduate’s debt suggests (scarily nearly $3,000), financial institutions are more than happy to hand over credit cards when you're in college, mostly because they assume that rich, tuition-paying parents can back you up. Ironically, now that you’re graduated and employed, it’s a bit harder to convince the lenders of the world to cover your late night IHOP

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