5 Student Loan Tips for Recent College Graduates
October 30, 2013

If you recently graduated, your grace period is coming to its inevitable end and it’s time to face the music and begin paying on your debt. But this is actually a good thing! The sooner you start paying your loans, the sooner they’ll be done and you’ll be debt free. To get you started off right, here are 5 student loan tips for all you recent grads:

#1 Figure Out What You Owe and to Whom

If you had to borrow for school, you likely have more than one loan and maybe even owe more than one type of loan. To make sure you are on track from the get-go, you need information. Sign up for a free student loan management account at Tuition.io to have all of your loans displayed on our easy to read dashboard. You can see exactly what your monthly total outlay will be and what your overall debt is.

#2 Explore Repayment Options ASAP

Once you have this information at hand and know how much money you need to pay out each month, the next question is – can you afford it? If you have a lower paying job or are still struggling to find a job, what you owe may simply be unaffordable on your current wages. If this is the case, apply for Income Based Repayment or Pay As You Earn for your federal student loans now to help lower the payments.

IBR and PAYE make payments more manageable

Image source: SmarterBucks.com

#3 Explore Forbearance or Deferment ASAP

Unfortunately, most private student loans don’t come with convenient repayment options like IBR or PAYE. If you know you can’t afford your payments, talk to your private loan servicer immediately. Tell them your situation and ask if they have an income based plan. If they don’t, apply for forbearance or deferment to avoid getting behind on these payments. This will allow you some breathing room to regroup.

#4 Think Carefully Before Consolidating

One of the pieces of advice we see bandied about is that you should consider “simplifying” your student loans by consolidating them but this is not the best idea. When you consolidate, your interest rates are averaged (not reduced!) which means that you will typically end up paying more in interest. Plus you can only consolidate once in the life of your loans and this should be saved as a safety measure in case you ever get behind on your loans because it is a move that can help you rehabilitate delinquent loans.

Public service loan forgiveness is a great option

Image source: DebtConsolidation.com

#5 Seek Forgiveness

If you have more debt than you can manage and are struggling in your job search, consider taking a job in the public sector. While these jobs may have lower pay than private sector jobs, they often have excellent benefits, one of which is student loan forgiveness. 10 years of public service employment combined with 10 years of payments under IBR or PAYE can see your balances forgiven tax free!

Get off to the right start with your student loans. Sign up for our free management and optimization tool here – we’re helping borrowers manage more than $25 million in student debt and can help you too! Read our blog for tips on dealing with debt and check out our Student Loan Help Center for detailed information on PAYE and IBR and How To Guides to walk you through applying for these programs!