Student Loan Debt Can Affect Your Career — Here’s What to Do About It

Student Loan Debt Can Affect Your Career — Here’s What to Do About It

Historically, students and recent graduates looking to begin their careers have focused on a fairly standard list of priorities. They have tapped into networks, practiced interview skills, fine-tuned their resumes, and searched diligently for interesting openings or new contacts. And the common logic has always been that this approach, done correctly, will result in fitting job opportunities.

This is still the case today, more or less (though some would argue that networks and connections are playing a bigger role than in the past). But today’s young professionals face additional challenges as they set about landing and beginning their careers. And one of the most common of such challenges is the burdensome student loan debt.

According to the latest student loan debt statistics updated this year, there are now some 45 million U.S. borrowers who owe a collective $1.7 trillion in student loan payments. These are astounding figures, and speak to why student debt forgiveness has become a common talking point in political circles in recent years. For the time being though, countless students owe substantial sums — and many of these students are those who are just beginning their careers.

This can be a little bit of a problem, and makes it all the more essential for young graduates to find ways of addressing the situation.

How Can Student Loan Debt Affect Your Career?

The most direct way in which student loan debt can affect your career is by making it less likely that you’ll be hired — which is why we tied this issue to the common process of applying for jobs. Significant unpaid debt, missed or defaulted payments, or other issues that can arise from student loans can, unfortunately, have a negative effect on your credit score. And among the disadvantages of a bad credit score today is the fact that employers are able to check on certain aspects of your credit history. It may not be a particularly common problem, but it is certainly possible for a prospective employer to turn you away from a promising job on the grounds that you appear to have less-than-ideal credit or financial standing.

More indirectly though, student loan debt might also stop you from pursuing the job or career you want in the first place. When you owe a significant amount of money, or your repayment plan is starting to be a burden, you are less able to take the time to find an opportunity that excites you, or which puts you on a trajectory toward the future you want. You may even find that you face a decision between pursuing a dream job or securing work that will help you pay off your loans. For that matter, you may even feel pressured to forego an opportunity like graduate school so as to start earning money and paying down your debt. These are all common challenges, and are among the main reasons students and graduates need to be proactive in addressing their student loan debt.

What Can You Do About It?

There are no easy solutions when it comes to paying significant student loan debt. However, there are some strategies you can adopt that make the payments more manageable. The most straightforward of these strategies is to pursue debt consolidation. This is effectively a type of personal loan that is used to pay off the entirety of your debt (or a sizable chunk of it) in one lump sum. This way, rather than facing a complex repayment structure, multiple loans from different periods of schooling, and high interest rates, you only need to pay back the personal loan itself. It’s still a financial burden you are responsible for, but it can alleviate your month-to-month pressure with a more flexible payment structure and lower interest rates.

If you would rather stick to conventional loan repayment, but you’re still looking for a way to make the process as painless as possible, another option is setting up autopay — or automatic payments of your monthly dues. The benefit here is simply that you eliminate the possibly of missing a payment, which is easy to do, and which ultimately makes loans even more burdensome. Additionally, some autopay arrangements will result in slight decrease of interest rates. It’s a sensible strategy to pursue, though it is also important to research different methods of autopay (in terms of how the payments are made) to make sure you choose one that will work for you.

Lastly, if what you owe is broken up into different individual loans, you can also try traditional repayment strategies, such as the famous debt snowball method. This is a simple but effective strategy by which you make minimum payments on all of your debts, but put everything extra that you can mange toward the smallest debt. The idea is twofold: First, by eliminating individual debts as quickly as possible you also stop their interest from mounting. Second, for each debt you knock out, you can roll over what you were paying for its minimum to the others. It’s not a shortcut or a means of escaping debt by any means, but many do find it to be a productive and efficient repayment method.

Ultimately, student loan debt remains an enormously troublesome problem, and the only way out is to pay what you owe. By adopting clear strategies and ensuring you don’t miss payments though, you can ease the burden and avoid any problematic credit hits. With those matters taken care of, you’ll have made it less likely that your debt will affect your early career in a detrimental way.

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Written by Ashley Simon

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