One final CliffsNotes for recent grads — on paying off student loans

The music has stopped, the cap and gown have been packed away, and now the work begins. But not the work you think.

Now you have to work on getting rid of your student loan debt. So where do you start?

“If you pay your student loan bills every month, and then try to forget the giant pile of debt to which your loans are attached — stop,” writes Reyna Gobel in “CliffsNotes: Graduation Debt: How to Manage Student Loans and Live Your Life” (Houghton Mifflin Harcourt, $16.99), which is the Color of Money pick for this month — again.

Several years ago, I reviewed the first edition of Gobel’s book. Oh, how times have changed, which is why I’m recommending the updated second edition.

College graduates — and many people who don’t have a degree — are carrying $1 trillion in student loan debt. The burden is so heavy that many households headed by young adults with student loans lag significantly behind their peers in wealth accumulation, according to an analysis by the Pew Research Center. The gap is wide. College-educated young adults with no education loans have about seven times the net worth ($64,700) than households carrying debt ($8,700).

Thirty-seven percent of households headed by an adult younger than 40 have some student debt — the highest share on record, Pew found.

But “you can manage your student debt while maintaining a lifestyle that is productive in the grand scheme of a financially secure future,” Gobel writes.

To start, stop thinking one monthly payment at a time. You have to know what you owe. After four years of college, people could have two or three loans per semester, Gobel says. You have to face your debt demons — all of them, she adds.

After a bachelor’s degree and two master’s degrees, Gobel added up her debt. She had amassed $63,000 in loans. She’s still making payments. But she has used her experience and her buckle-down budgeting approach to paying off the debt and writing “Graduation Debt,” which is part of the CliffsNotes brand.

Given the complexity of the rules around student loans, having CliffsNotes helps. Gobel gets you started with recommending that borrowers create a chart of their debt. From there her book covers a lot of territory, including defining loan terms, information on consolidating your loans, the difference between federal and private loans, various repayment options, budgeting, and strategies to pay your loans off early.

I love the advice about constructing a chart. Sounds simple. And yet lots of borrowers haven’t taken the time to map out what they owe. Gobel suggests creating two charts, one for your federal loans and another for any private debt you may have.

I’ve come across a disturbing number of student loan borrowers who know little about their loans. They can’t tell you the interest rates, what company is servicing their debt or even how many loans they have.

You have to take the step to organize the debt so that you don’t forget any loans and go into default. I was helping a relative organize her debt. She had no idea that she was in default on one of the loans because she had overlooked it.

If you’re having trouble making your loan payments, you’ll find a lot of help in the book on how to recover, including information about new regulations for people in default.

If you fall behind on your student loans, you have to make good-faith payments to get out of default. For many people, such payments are unaffordable. But now there’s default rehab, Gobel writes. As of July, a new formula will be used to make default rehabilitation payments more affordable.

There are a lot of myths about student loans, and Gobel debunks them chapter-by-chapter. You’ll find the section on budgeting helpful because you have to figure out where to find the money to make your loan payments.

This isn’t a summer fun read. But it’s full of the information borrowers need to know. So, if you’re still trying to figure out what type of gift to give a recent college graduate, get this book if he or she has loans. It should help them get focused and on track to pay off their debts on time, if not early.

I’ll be hosting a live online discussion about “Graduation Debt” at noon Eastern on July 3 at washingtonpost.com/discussions. Gobel will join me to answer your questions about managing student loans. Let’s talk about life with student loans. Send your comments about your student loan situation to colorofmoney@washpost.com.

Write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or singletarym@washpost.com. Questions may be used in a future column, with the writer’s name, unless otherwise requested. To read more, go to http://wapo.st/michelle-singletary.