Congratulations! You’re graduating soon and will be searching for your first job out of college. It’s an exciting time in your life. However, if you’re like the majority of college students, you’re also graduating with student loan debt. Now is a good time to make sure you’ve got a plan for knowing how to manage your student loans after you graduate.
Here are some easy steps you can take to set yourself up to successfully manage your student loans.
The best place to start is at the National Student Loan Data System (NSLDS). You can find information here about all of your federal loans. This will give you all the details you need to understand how much you’ve borrowed on your federal loans and who to contact for questions about your federal student loans.
If you used private (or alternative) loans from a bank or other financial entity, you’ll need to check with your lender to make sure you have the correct information for those loans.
At StudentLoans.gov you can access a repayment estimator for your federal loans that will give you an idea of what your monthly payment would look like under the different repayment plans available. Depending on your individual circumstances, it’s likely there is a plan that will work for you. If you have relatively low debt and a good salary, you may want to pay off your loans as quickly as possible. The standard 10-year repayment term allows you the quickest and lowest cost method to pay off your loans.
However, if you have a higher debt load or lower income, there are options that can tie your student loan payments to your income. Income driven repayment plans are often helpful since they give you a more affordable monthly payment based on your income. You can learn more about these options as well as how to apply them to your student loans at StudentLoans.gov.
For private loans, you can visit your lender’s website to access repayment calculators or simply contact your private loan provider for additional information on what your monthly repayment amount will be.
Your federal loans and most private loans offer the ability to postpone payments while you’re enrolled in school on at least a half-time basis. That means you’ve probably not made any payments on your loans, or perhaps you’ve made some small payments to offset accruing interest. You are also given a grace period on your loans, which is typically six months from your last day of school (usually when you graduate or have dropped below half-time enrollment). At the end of that grace period is when your first payment will be due. Make sure you know when that due date is so you can begin to prepare and budget for that new payment.
There are a number of options for borrowers who encounter situations that make it difficult to make their student loan payments. Your student loan servicer will work with you to find a solution, but you have to contact your servicer to get assistance. For example, if your income has changed dramatically you might want to change to an income driven repayment plan or adjust the plan you’re on based on your change in income. Additionally, if you return to school, to pursue a graduate degree for example, you can postpone (or defer) your student loans while you’re back in school. Don’t make the mistake of simply ignoring your student loan payments and damaging your credit score.
As you look forward to graduation and starting a new chapter in your life, just remember to do a little planning and research now to best manage your student loan payments and find the best repayment plan for your situation. And remember, your student loan servicer is there to help you if you have any questions.