Cameron Ingalls/Cal Poly Commencement Office

Now that you’ve just graduated, you have to think about paying off those pesky student loans. Stay positive. It may feel like you are swimming in debt; however, Cal Poly students have a leg up compared to most recent graduates.

According to, the average debt acquired by Cal Poly graduates is $23,372 over four years, compared to the national average of $35,200. Additionally, alumni default on paying their loans at a rate of 1.6 percent, significantly lower than the seven percent average default rate for all students who receive federal loans.

Director of Financial Aid and Scholarships Lois Kelly attributes this to two factors: potential for resource acquisition and student financial responsibility. Kelly believes that the Learn by Doing quality of a Cal Poly education makes graduates stronger candidates for jobs with higher earning potential, enabling efficient loan repayment. Kelly takes great pride in the financial responsibility of the students she oversees, and praises this exceptional attribute of our alumni. So what does being financially responsible entail? Kelly enlightens students on the following tips to pay off loans ASAP.

  1. Be aware of what you signed up for. By accepting the promissory note to receive your student loans, you sign a legally binding contract with the federal government. It is important to know what your specific contract entails.
  • Are your loans subsidized or unsubsidized? The federal government pays off interest accrued on subsidized loans until six months after graduation; unsubsidized loans accrue interest from the day they are taken out until the last payment is made. Although you are given a six month grace period for repayment post-graduation, early repayment helps avoid interest accumulation.
  • Have you calculated the date your loans will be completely paid off? Your monthly payment will be calculated based on a variety of factors, such as interest rate, starting income and your state of residence. Knowing when your last payment will be met can help you plan to push the date closer.
  • Who is your loan provider? Many loan monies are distributed by Cal Poly, but the student must repay a particular loan agency. The agency should have emailed you within 30 days of loan dispersal. But if you are unaware of your servicer, you can find out at the website
  1. Don’t default on your payments. This may seem obvious, however, many people lack understanding on the severity of loan default. Loan providers alert the federal credit bureau of defaults, lowering your credit score. Potential landlords discredit those with low scores; mortgage seekers will be denied; annual tax refunds are seized by the government for loan repayment.

Additionally, lending agency debt collectors may harass you with phone calls. Kelly warns that debt collectors can be “extremely persistent in calling both you and your family, using strong language and a harsh tone, with almost abusive behaviors including shouting, yelling, using inappropriate language and even coming to harass you at your place of work.” As she puts it, this behavior is merited because you — the debtor — are legally at fault.

  1. Keep in contact with your lender. According to Kelly, good communication with your lending agency is the key to evading such treatment. It is recommended to develop a good rapport with your lender and inform them of your residence after college. In this case, they can be forgiving as opposed to incriminating, and offer counsel.
  2. Budget and live frugally. If you didn’t have a budget throughout college (which Kelly highly recommends), start now and make loan repayment a top priority. Many recent graduates are young and unattached, with ample income to support their lifestyle.

But down the road when family life comes into play, making monthly payments becomes increasingly difficult. Living frugally your first few years out of college can ensure that less of your future income overall is directed toward loan repayment. Small cuts, like making coffee at home in lieu of a $5 latte from Starbucks, can make a big difference in the long run.

  1. Learn what resources are available to you. If you have a modest starting salary, consider a graduated repayment plan. Initial payments start small and gradually increase, similar to salary increases over time. As a benefit, certain employers may provide loan forgiveness incentives as well. University faculty, military and public service and teaching grants are a few examples of these. Additionally, many loan servicers will reduce your interest rate up to 0.25 percent by signing up for direct payments from your bank account.

Information on these benefits and other helpful information regarding student loan repayment can be found at,, or the website of your loan servicing company.

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