Understanding and Managing Your Debt

For student veterans, debt can powerfully impact their life goals and transitions. While education often requires investment, carrying too much debt can delay financial independence, limit career choices, and slow their ability to reach other important milestones. If you're a student veteran just starting, in the middle of, or finishing your educational journey, managing debt is essential to setting yourself up for a successful future.

Read on to examine why debt matters and how you can take control with simple, actionable steps to keep your finances on track.

How Debt Affects Your Goals

Debt affects your ability to make life decisions. Whether you want to purchase a home, start a business, or pursue further education, high debt levels can make these goals harder to reach. It limits your flexibility and adds stress, potentially keeping you in jobs or locations that could be better simply because you need the income to keep up with payments.

For many student veterans, avoiding debt entirely when possible is the best way to get where you want. If you already have debt, paying it off quickly can open doors to new opportunities and greater peace of mind. Here's how to get started.

Create a Realistic Budget

A budget is essential for managing debt. Track your monthly income and expenses to see where your money goes and find areas to cut back. Set a spending limit for each category and monitor it weekly. Use free budgeting tools and apps to simplify tracking and stick to your budget consistently. 

Budgeting helps you avoid unnecessary expenses and frees up money to pay down your debt more quickly.

Take Advantage of Military Education Benefits

As a veteran, you may qualify for education benefits that can offset the cost of college and reduce the need for student loans. The GI Bill® and Yellow Ribbon Program are two of the most valuable resources, covering tuition, fees, and other educational expenses. Utilizing these benefits can minimize or eliminate the need for student loans.

If you're still exploring funding options, talk to a college financial aid advisor to fully understand what's available to you. Also, check in with the Veterans Administration (VA) to verify any specific questions. 

Avoid Taking on More Debt Than Necessary

Only borrow what you need. When student loans are necessary, be realistic about the loan amounts and avoid overborrowing. It's easy to take out more than you need, but every dollar borrowed adds up over time.

Before taking out a loan, evaluate your projected monthly payments and determine whether they're manageable with your anticipated income after graduation. Many online calculators can help you estimate these future payments so you can make informed borrowing decisions.

Focus on High-Interest Debt First

If you already have multiple debts, prioritize high-interest loans like credit cards. High-interest debt grows faster than low-interest debt, so it's crucial to pay it off quickly to reduce the interest you'll pay over time. Once you've eliminated high-interest debt, use the same strategy to tackle other loans, paying more than the minimum whenever possible.

For student veterans, paying down debt from highest to lowest interest can free up your finances faster and reduce the repayment burden.

Look for Loan Repayment Assistance Programs

Specific programs offer repayment assistance for veterans. For example, the Public Service Loan Forgiveness (PSLF) program forgives federal student loans for those who work in qualifying public service jobs. Additionally, some employers offer loan repayment benefits as part of their compensation packages. Research these options early to understand your eligibility and take advantage of them if they align with your career plans.

Build a Small Emergency Fund

Building a small emergency fund may seem challenging while managing debt, but having a financial cushion can keep you from relying on credit cards or loans in case of unexpected expenses. Start by saving a modest amount each month until you set aside at least $500 to $1,000. This fund will give you peace of mind and protect your progress in reducing debt.

Schedule a 30-minute coaching appointment with GGU's Military Student Success Coach here.