Graduating Soon? 5 Must-Read Tips to Get Off to a Good Start with Student Loan Repayment
May 20, 2014

If you’re getting ready to walk the stage in your mortarboard and get that coveted and hard-earned sheepskin this month, congratulations. Whether it took you four years or a decade to get there, you’re graduating and that’s awesome. But if you borrowed to attend school, you’ve got some consequences to deal with – and soon. If you’ve just graduated or will in the next few weeks, check out these tips to get off to a good start on your repayment so you can keep out of money trouble and be debt-free as soon as possible.

Graduation day is here

Graduation days marks the countdown to your first student loan payment
Image source: Will Folsom via Flickr Creative Commons

#1 Get Educated on What You Owe

Many grads don’t have a clue how much they owe in student loans until their first statement shows up and others didn’t base their debt on ability to pay. If that’s what you did, that’s okay – it’s done now, Hakuna Matata, we’ll help you deal with it. Sign up here for our free student loan tool the second you’re done reading this blog. We’ll gather all your data and then when you sign in, you’ll see how much you owe, who you owe it to and what your monthly payments will be. This includes both federal and private loans so you can get a complete understanding of what you owe to the penny.

#2 Figure Out if You Can Afford Your Loans

Once you find out how much you owe, the next step is to know how much this equates to in monthly payments. You can see this on your dashboard at If you have a job lined up already, that’s awesome. But you need to know what percentage of your take-home your loans will take-up before you start accumulating other debt and obligations. If you buy a new car fresh out of school or choose a costly apartment without taking into account your student loan obligations, you can be setting yourself up for failure from the get-go. Check out this article on budgeting using the 50/30/20 rule.

#3 Apply for Alternate Repayment if You Can’t

If you owe more each month than you know you’ll be able to pay because you simply borrowed too much, you can’t find a job or you got a job but won’t be earning enough to service the debt, you need to get proactive to make your debt more affordable. Click here to read How To Guides on applying for Income Based Repayment and Pay As You Earn. PAYE offers the lowest possible monthly payments. Take time to apply for this alternate repayment before your grace period expires so that you can start out under these lower payments rather than the higher amounts required under the traditional plan.

#4 Skip the Grace Period

You get a grace period of six months after graduation when you don’t have to make any student loan payments for federal loans. Private student loans usually don’t come with this option. But if you’ve got a job and can afford your payments, there’s no reason to not start paying as soon as you get your first paycheck. Starting your repayment right away will get you into the habit of living within your means. The sooner you start your repayment, the sooner you’ll be out of debt.

#5 Make Extra Payments Early and Often

No matter what repayment plan you’re paying under – traditional, IBR or PAYE – you should make additional payments toward principal as often as you can. The only exception to this tip is if you will qualify for Public Service Loan Forgiveness. Otherwise, any bonuses, windfalls or additional money you can get your hands on should be devoted to principal on your loans. Using our student loan tool, you can check out how making extra payments will lower your interest payments and speed you toward payoff.

Congrats on your big day and finally getting your degree! We hope these tips get you off to a good start. We encourage you to read our blog often for lots of valuable advice on how to deal with your student loans.