What is the best option for a recent college graduate with large school loans during a recession?

Paying off loans is the best option for a recent college graduate with large school loans during a recession due to several important financial considerations. Firstly, during a recession, job security may be compromised and income uncertainty can increase. Focusing on paying off school loans reduces debt burden and financial stress, providing a more stable financial situation in case of job loss or reduced working hours.

Additionally, high-interest loans can accrue significant amounts of interest over time, particularly if the graduate is not actively making payments. By prioritizing debt repayment, the individual can save money on interest over the long term and improve their credit score, which can be beneficial for future financial endeavors, like securing a mortgage or obtaining loans at lower rates.

While investing in the stock market could offer potential returns, it carries risks, especially during a recession when market volatility increases. Saving for a new car or buying a home can also impose additional financial responsibilities that may not be wise in a time when cash flow is uncertain. Therefore, focusing on paying off loans can help establish a strong foundational financial footing for the future.