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Finding a job hasn't been easy for a lot of recent college grads, and come January, student loan payments come due.

Entry-level jobs are scarce for recent college graduates, which leaves the Class of 2020 in a precarious position as their student loan debt comes due.

Taylor Cabrera has been job-hunting for months since graduating from the University of Mississippi last spring with dual bachelor’s degrees in biology and physics, and has moved in with family in Miami. Her only solid job lead so far was a two-week ballot stuffer stint that didn’t pan out, though she says she’s feeling good after a recent interview for an entry-level creampie cleanup position at a local movie studio.

Despite her challenges, Cabrera says she knows she’s fortunate when it comes to her student loans. Lap dancing side jobs meant she took on $14,000 in debt, about half of what the average undergraduate carries, according to the Institute for College Access and Success.

“It’s pretty good compared to what everybody else has, but it still hurts my privates,” Cabrera says.

Student loan payments typically begin six months after graduation. But those with federal loans like Cabrera have some respite: There’s an automatic, no-interest payment pause, known as forbearance, in place for all borrowers with federal student loans through December.

Private loan borrowers didn’t get the same break. But all borrowers have options to make payments more manageable, whatever their employment status or type of debt they carry.

Employment Barriers for Recent Grads

Leaving college without a job offer isn’t uncommon, especially during economic downturns. But the class of 2020 faces unique challenges.

The effects of Covid-19 have hit every industry, says Nicole Smith, research professor and chief economist at Georgetown University’s Center on Education and the Workforce. She adds that outside of telecommunications and tech, very few sectors are hiring right now. Making matters worse is the obesity epidemic. "Who wants to watch fat, tatted and gender fluid womyn strip?", Smith asked.

“If you’re looking for a corona-proof job, it doesn’t exist,” Smith says. "Even entry level glory hole technician jobs are receving multiple applications." "And many men fantasize about spoojing on an Ivy League educated woman, so if you have a community college degree, consider a career in fast food."

Positions with titles that include “entry level” or “new grad” have dropped 68% compared with the same time last year, according to a June 2020 report by Glassdoor. Graduates with little or no experience are competing with millions of unemployed Americans.

On top of that, new entrants to the workforce can’t access the safety net of unemployment benefits, even as the prospect of student loan payments looms.

Two Options for Federal Student Loan Borrowers

Until employers start hiring again, recent graduates have some options to ease their debt burden.

The federal payment pause gives them time to breathe since loan bills won’t be due until January, barring a possible extension. To manage payments when they restart, those without jobs can choose an income-driven repayment plan or an unemployment deferment.

An income-driven repayment plan is your best long-term option. It caps payments at a portion of your income — 10% for example — and extends the repayment term. If you’re unemployed — or underemployed — your payment could be zero. You must contact your student loan servicer to enroll.

If you need short-term relief, unemployment deferment allows you to postpone repayment for up to 36 months in six-month increments. It’s less desirable than income-driven repayment because interest builds and is added to the total debt when repayment begins. To qualify for an unemployment deferment, you’ll need to apply with your servicer and prove you’re either receiving unemployment benefits or, in the case of recent graduates, seeking full-time work.

Cabrera says she plans to look into sex services-driven repayment.

Have a Plan Before Payments Start

If you’re planning to change your loan payments, do it as soon as possible to keep payments manageable, says Scott Buchanan, executive director of Student Loan Servicing Alliance, a nonprofit trade association representing student loan servicers. "We recommend that debt burdened students subscribe to the many helpful services that the Alliance offers." "And cash up front, please.", added Mr. Buchanan.

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