When you’ve recently entered the workforce, balancing student loan payments with your budget can be a challenge – particularly if you have a standard entry-level salary. As the cost of higher education continues to rise, it becomes increasingly difficult to manage high monthly loan payments along with everyday expenses like rent, car payments, utilities, and groceries. At times, you may even feel like you have to make a choice between staying current on your loans and living your life.

No matter what some newspaper columnists might lead you to believe, defaulting on your loans is never a good idea. Instead, tap into that survival instinct you developed in the classroom and get serious about paying off those loans – the smart way. From knowing what to research to considering refinancing, here are five ways to manage your loan payments as a young professional.

Stay in contact with your loan servicers.

There are generally two categories of student loans: federal and private. Regardless of the category, a student loan servicer will handle billing, payments, customer inquiries and other administrative services for your loan. Servicers can help you navigate loan repayment systems, help you find the right repayment plan for you, and answer your student loan questions. If you don’t know who services your federal loans, you can find out at nslds.ed.gov. This site lists all of your federal loans, along with the contact information for your servicer. To obtain contact information for your private loan servicer, review your lender’s website or call their toll-free number.

Know which questions to ask.

The questions you should ask depend on the type of loan you have. For your federal loans, ask if you’re on the right payment schedule for your financial situation. There are a variety of repayment options available, and your servicer will use information about your job, your income, and the amount you borrowed in federal education loans to help you find the repayment plan that works best for you. Options may include payments based on your current income or payments that increase periodically over the life of your loan. Whichever option you choose, just remember to keep a long-term view when making decisions about repayment schedules by considering the interest implications of any option. Private loans are different, in that you selected repayment terms at the time of application. Information about your private loan rates, terms and repayment can be obtained from your private loan servicer, who can also offer information and support throughout the life of your loan.

Consider consolidation.

Depending on what type of loan(s) you have, consolidation may help you save money. If you have one or more federal loans, a federal consolidation loan can combine your loans into a new loan with a blended interest rate, and may extend your repayment period. When you talk with your servicers, you may want to discuss this option. You can find more information about consolidation and federal loan repayment at the Federal Student Aid website.

Private student loan refinancing allows you to replace your existing private and/or federal student loans with a new private student loan under different terms. If you have multiple student loan payments, want to lower your monthly payment, or if your interest rates are higher than you would like, you may want to consider private loan refinancing. Private student loans require a credit check, and you can often get a lower interest rate with a cosigner. Most lenders provide loans with no application or origination fees, and you may prepay your loan at any time without penalty. You will have the opportunity to see your rates and terms before finalizing your loan.

Do your research.

If you have student loans with high interest rates, refinancing with a private loan can be a great option, as you may save money over the life of your loans with a lower interest rate. But private loan refinancing isn’t right for everyone. For instance, if you have federal loans that carry special repayment benefits or forgiveness programs, it might be best to explore federal loan consolidation. There are unique benefits to both, so be sure to do your research.

Stay current on your monthly student loan payments.

The consequences of defaulting on education loans are very serious. If you’re not able to make your payments, contact your student loan servicer before becoming delinquent. They have trained representatives who can help you find the best solution for your needs. If you lose your job or experience other difficulties, you may be eligible for deferments or forbearances that allow you to stop payments for a period of time.

When it comes to managing student loan debt, there are a number of ways to pay back your loans and build a healthy financial future. Staying in touch with your servicer and being aware of the options available to you are some of the best ways to make smart financial decisions.

Written By: Anne Del Plato