How to Start Your Business While Paying Off Student Loan Debt

As an aspiring entrepreneur, you might be wondering how to start your business while paying off debt from student loans.  It may seem impossible, but the following post has some tips that may put you on the right track.

A recent article in The Wall Street Journal discussed the almost insurmountable problems new entrepreneurs may face when they graduate with a crushing burden of student loans. GTE Financial has advice to help avoid or minimize some of these problems.

Shamus McConomy, Vice President of
Member Business Services at GTE Financial

“With student loans now accounting for nearly 9 percent of consumer debt, this is a very real issue that could well put a damper on future innovation in this country,” says Shamus McConomy, vice president of member business services at GTE Financial. “We think it’s important to provide additional information and options to help tomorrow’s entrepreneurs get started earlier and with fewer impediments.”

Here are some of the tips McConomy offers:

—  Reconsider getting a graduate degree if you have entrepreneurial
aspirations. “You’re going to hire yourself regardless of how many
degrees you have, so why accumulate additional debt?” he says.

—  If you begin considering your idea while still studying for a degree,
enter every business plan competition you have access to. You’ll be able
to take advantage of vetting and advice from industry and business
experts who can help you avoid many typical startup mistakes.

—  Apply for internships with businesses in the same space as your business
idea to get firsthand knowledge of what works.

—  Many communities have small business incubators, and a number of them
are located at universities. They can help coach entrepreneurs and even
assist with advice about financing.

—  Incubators and Small Business Development Centers offer a wide range of
free and low cost seminars, many on topics that are designed for
first-time entrepreneurs, such as how to develop a business plan,
deciding on the right type of business entity, protection of
intellectual property and many more.

—  Take the time to develop a strong business plan and work on getting an
SBA loan that includes working capital, which can be used to help pay
living expenses while the business is getting off the ground.

—  Find investors (often Friends and Family Financing) who can help with
seed money that can be used to help pay the bills until the business
begins to generate revenue. Just be sure to keep a majority ownership.

—  Take a part-time or evening job that allows you to spend a majority of
your time on the business while still providing income to pay the bills
and pay off student loans. Once you go for the high paying post-college
job, you tend to lose the flexibility (and time) to work on your own
idea.

“There are a number of good community support options for entrepreneurs of all ages, but we want to be sure we are exposing new entrepreneurs to them early enough to avoid the burdens of oversized student loan debt,” says McConomy. “In the end, this is an investment in our country’s future.”