(BPT) - As the academic year comes to an end, many are taking a monumental step in their lives. Whether they're high school graduates headed off to college, college graduates about to experience life outside the classroom full time, or parents who have continuously offered their support and are about to become empty nesters, this transitional time can be consumed by many emotions.
Along with any major life milestone comes the point in time when it's necessary to make informed decisions and have confidence to take the next step, and one increasingly looming challenge involves the prospect of a mountain of student debt faced by so many families. According to EducationData.org, 47.9 million borrowers in the U.S. have student loan debt. In fact, Americans of all ages and generations feel the impacts of student debt, with Fidelity data indicating Baby Boomers are more than twice as indebted as Gen-Z. It's important to know the resources available to students and parents at every stage of the journey, whether that's before a child enters high school or 10 years after graduation from some form of higher education. Here are five tips for tackling student debt at any life stage:
1. Plan ahead
According to a recent Fidelity Investments study, nearly 6 in 10 parents (59%) use their 'own best guess' when estimating college costs and one-third (32%) have no idea what college will cost by the time their child enrolls. It's never too early to start saving or planning for college. As soon as possible, parents and children should schedule family time to begin discussing college expectations, which should include costs, financing options and their potential near- and long-term impact. The burden of college prep is a team effort shared by both schools and families but expect to do some independent research to understand key dates.
2. Make your study years count
As students take on more responsibility after high school, practicing good budgeting fundamentals early on will come in handy when student loan repayments take effect post-graduation (typically, six months after graduation). While the federal loan repayment is currently paused, there are different types of student loans and repayment pauses may not apply to all student loans, so it's best to be prepared. Take the right steps after high school to feel confident in making financial decisions and understanding financial basics to help ensure a smooth transition into adulthood.
3. Take advantage of resources
The best way to be prepared for the inevitability of repayment is to have a steady source of income. Take advantage of college and post-secondary school resources to ensure success with job hunting. Most institutions have career centers dedicated to helping prepare students and alumni for life after school by giving advice on resume building, pointing job seekers toward recruiters and job search engines as well as facilitating access to alumni networks and professional affiliations.
4. Consider how certain career choices may impact forgiveness
Some career paths qualify for student debt loan forgiveness after certain criteria are met. If a particular career is of interest, research the different employers available and qualifications needed under the Public Service Loan Forgiveness program.
5. Seek out employer benefits
Some employers may help make payments toward students loans to attract and retain top talent. A Fidelity Investments analysis even found 50% of new hires with student debt considered whether the company had a student loan repayment benefit as a major factor in their decision to join the company. Have a thorough understanding of any new or existing benefits offered through the workplace by checking in with human resources and requesting more information on student debt loan assistance benefits.
Fidelity Investments was an early adopter of student debt loan assistance, offering the benefit to its own employees since 2016 and then making it available as a benefit choice for plan sponsor clients. Most recently, Fidelity partnered with the University of North Carolina School of the Arts to create an immersive 360 film that gives employers a glimpse at the very real student debt conversations that are inundating their workforce and their families. For more information visit https://bit.ly/3MOCcux.
