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How to Keep Student Loans From Idling Your Entrepreneurial Dreams

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Paying off student loans shouldn’t feel like a bigger accomplishment than earning a degree, but that’s the unfortunate reality for many graduates. Higher education isn’t cheap, and if graduates can’t afford their payments, loans can become a major financial hardship.


According to a recent report, 69 percent of graduating students have student loan debt., with an average loan balance surpassing $30,000 in some states. It’s no surprise that “I’m broke, and I have the degree to prove it” has become a popular saying on Pinterest.

Graduates who aren’t diligent about paying off their student debt can damage their credit scores. Missing just one payment can put a major dent in their future buying power. If an individual’s credit isn’t pristine, many lenders won’t take the risk of extending even a small business loan.

This is a major problem for aspiring entrepreneurs. Many graduates with debt are forced to take jobs they aren’t passionate about just to pay their bills and keep their credit intact. For some, this delays their startups’ growth or, in some cases, destroys their entrepreneurial ambitions altogether.

Related: How to Start a Business With Student Loans and Not Go Broke

Work around student loans to give your startup a chance.

However, there’s no reason to give up on entrepreneurship just because you’re in a tight spot financially.

Six months after graduating law school, my wife’s student loan debt repayment came to maturity. With close to $200,000 in debt, a delay between graduation and taking the bar, plus a surprise pregnancy, we realized we needed to change our plans. After researching our options, we discovered that we could defer her loans due to unemployment/financial hardship.

If you’re worried about paying off your student loan debt, talk with your lender about repayment options or possible loan forgiveness, forbearance or deferment. In addition, consider pursuing these three job options to keep your entrepreneurial dreams alive:

Contract positions: Taking contract positions on a per-project basis allows you to earn larger lump sums of money to put toward paying off your debt. Contract work also gives you more free time and flexibility to work on your startup.

Evening work: If you’re already working a day job (or your days are dedicated to your startup), you can take a higher-paying job in the evenings, such as bartending or serving at a high-end restaurant. Bartenders working Friday, Saturday and Sunday nights can earn $1,500 a weekend, which makes this a great way to pay off debt quickly so you can get your startup off the ground.

Nonprofit positions: To entice more graduates into the nonprofit sector, there are exceptions available to graduates who work for 501(c)(3) organizations and meet specific working guidelines. After a certain period of time, you can have your student loan debt adjusted, or even forgiven, based on your salary. You’ll have to keep the job for a while, but once you’ve put in your time, you’ll be able to start your business with a clean slate.

Related: The Changing Economics of Student-Loan Debt: How to Pay It Off and Startup

If you haven’t graduated yet, you need to work on keeping your student loan balance as low as possible from the time you submit your college applications until you graduate.

First, assess whether the cost of your degree makes economic sense with the starting salary for your chosen career. If you’re getting a degree to help with your business, ask yourself whether you need a pricey university degree to learn the necessary skills, or a community college or accredited degree program would suffice. Can you live at home to reduce expenses? Finally, get a job while you’re in school to earn some money. Don’t borrow more than you need to.

Student loan debt can feel overwhelming, but don’t lose sight of the fact that you got your degree for a reason. You can still use it to accomplish your goals. You may just have to work a little harder to get your startup off the ground. No matter what, you owe it to yourself to do everything you can to keep your dream alive.

Related: 10 Ways to Improve Your Credit Score

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