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A12 business
Monday 17 april 2023

Why new grads shouldn't fear a recession

By TREA BRANCH
of NerdWallet
In 2023 alone, there have
been over 118,000 U.S.
tech layoffs, according to
Crunchbase News, a busi-
ness publication.
That's in addition to two
major bank collapses and
two federal rate hikes. The
class of 2023 will graduate
into this economic upheav-
al while facing another
variable: student loan pay-
ments.
This can be an overwhelm- The cap of a University of Iowa graduates candidate is
ing and confusing time for decorated with writing reading "Cancel student debt" during a
those set to begin repay- commencement ceremony for the College of Liberal Arts and
ment of student debt, says Sciences, Saturday, May 14, 2022, at Carver-Hawkeye Arena in
Barry Coleman, vice presi- Iowa City, Iowa. Associated Press
dent of program manage-
ment and education at the vises Mayotte. Programs can include ac-
National Foundation for Then, know your expected cess to financial advisors at
Credit Counseling . income, your expenses no cost to the employee,
Coleman cites the expect- and how your student loan or even student loan re-
ed end of a three-year payments will fit into your payment programs — both
pause on federal student budget, says Coleman. This of which could offer addi-
loan payments, legal chal- will limit any surprises once tional protection in a slow
lenges to federal student repayment begins. economy.
debt relief programs and IF YOU HAVE A JOB, PAY IF YOU DON'T HAVE A JOB,
the potential impact of in- OFF STUDENT DEBT FASTER KNOW YOUR OPTIONS TO
flation on the job market If you land a job, you have STAY CURRENT
as reasons new graduates more flexibility. A steady Graduating without a job
could feel uneasy. income gives you the op- offer can be terrifying, es-
But new grads don't need portunity to explore put- pecially if the economy is
to panic. Here's how they ting more money toward expecting a downturn. But
can weather a potential your student loan debt — if with low or no income, you
recession and the finan- you're already contribut- can take steps to stay on
cial uncertainty that might ing to your retirement and top of your student debt,
come with it. emergency savings. even in a recession.
HAVE A PLAN FOR YOUR For borrowers who have Start with your loan ser-
STUDENT LOANS, NO MAT- the capacity to make vicer, the company that
TER THE ECONOMY more than the minimum manages your loans. Let
Understanding your stu- payment on their student them know as early as
dent debt is one of the best loan, this is the chance to possible that you're not
strategies to stay on top of get rid of student debt as employed, says Coleman.
your loans, regardless of quickly as possible, notes Ask what your options are
how the economy is per- Coleman, while saving as to avoid delinquency —
forming, says Betsy Mayo- much money as they can which is missing a student
tte, founder of The Institute on interest. loan payment.
of Student Loan Advisors. And don't overlook your There are many repayment
There is typically a six- employer. options for federal student
month grace period after Twenty-one percent of loan borrowers, says Moy-
graduation before you're employers offer company- ette. You can lower your
required to make your first paid financial services as payments — even to zero
student loan payment. part of their benefits pack- dollars — with an income-
Before this first payment is age, explains Jim Link, chief driven repayment plan, or
due, gather details like the human resources officer for temporarily stop payments
types of loans you have the Society for Human Re- through student loan de-
and who holds them, ad- source Management . ferment.
Just note that interest can
still accrue while in defer-
ment, and this increases
your total student loan bal-
ance.
Once you land a job and
you're in a position to repay
your student loan, do so as
soon as possible so you're
not facing a significantly
larger debt down the road,
advises Coleman.q