Crushed by Student Loan Repayment - Young Adults Starting Life in Debt

About a 3 min read.

Student Loans Are Debt

About 1.3 million people use Japan Student Services Organization loans. Average borrowing is roughly 3 million yen over 15-20 years. The term "scholarship" masks the reality: interest-bearing loans are unambiguously debt. Repayment of 10,000-20,000 yen monthly starts from year one, squeezing low-income young workers.

Three Ways to Overcome Repayment

1. Know Deferment and Reduction Programs

Low income qualifies for repayment deferment (up to 10 years) or reduced payments (half or one-third monthly). Contact JASSO before defaulting. Default damages credit records, affecting future loans and credit cards.

2. Consider Accelerated Repayment

Bonuses or windfalls can reduce total interest through early repayment. Especially effective for interest-bearing Type 2 loans. But maintain an emergency fund (3-6 months' expenses) first. (Books on student loan repayment can also be helpful)

3. Build an Income Growth Strategy

Reducing payments has limits, so also consider increasing income. Certifications, side work, job changes. Especially in your 20s, skill-building that raises income lightens the entire repayment period. (Books on money management offer concrete strategies)

Summary

Student loan repayment is overcome through deferment programs, accelerated repayment, and income growth. Don't bear it alone; maximize available systems.