Although the exact timeframe depends on your lender, you’ll typically start paying off your student loans six months after graduation or fall below halftime. But if you’ve never had a loan before, it may take some getting used to. If you’re approaching graduation day, take stock of how much you owe, how long your grace period is, and how you’ll need to adjust your monthly budget to account for payments.
When do you start repaying student loans?
Most federal student loans require borrowers to start making payments six months after graduation, drop below half-time, or quit school. This period of time is called a grace period. Parents who have taken out PLUS loans do not automatically benefit from this grace period, although they can apply for one.
When it comes to private student loans, options and repayment plans vary. Most private student loans allow you to defer payments until you graduate, and many offer their own grace periods ranging from six to nine months. In some cases, private student loans offer payment plans that allow you to make interest-only payments or fixed monthly payments during school, in which case you will make partial payments on the student loan as soon as the loan is completed. will be disbursed.
How do I make my first student loan repayment?
To make your first student loan payment, you will need to open an account with your loan officer or lender. You will receive a billing statement from your repairer before your first payment is due; this statement will tell you the payment amount and the due date, and it may include instructions on how to make the payment.
Most student loan servicers allow borrowers to make payments online, via a regular check, or even over the phone. Many companies also allow borrowers to set up their student loans for automatic payments.
What if I don’t have a job yet?
If your student loan payments are coming due and you don’t have a job or other sources of income, there are ways to apply for temporary help.
Federal student loans come with deferment and forbearance programs that allow borrowers to skip monthly payments in times of hardship. You can learn more about temporary deferment and forbearance options for federal student loans at Federal Student Aid website. You can also get relief by setting up your student loans for income-contingent repayment. These plans base your monthly payment on your income, and payments can be as low as $0 for those who qualify.
If you have private student loans, you will need to speak with your individual lender. Private lenders may have their own deferment options for borrowers who are unemployed, although these are temporary solutions.
Strategies for starting student loan repayment
As you prepare to start paying off your student loans, there are several steps that can get you on the right track. Consider these strategies to get ahead of your monthly student loan bill.
Find out who your loan manager is
Your loan officer is the company you will be making payments to. In general, you can find out who manages your loans by visit your Federal Student Aid account dashboard (if you have federal loans) or check your credit reports (if you have private loans).
Keep a record of all your loan managers – you may have more than one if you have multiple loans. You will receive regular communications from your managers regarding the repayment of your loan and you will be required to make payments to each.
Know your total balance and your monthly payment
Before you begin repayment, confirm your total loan balance and monthly payment by logging into your Federal Student Aid account or the account you have with your servicer. You can use a loan calculator to dig deeper into how different repayment terms will affect your monthly payment and what happens if you make additional payments.
Create a budget
Look for ways to make sure your monthly student loan payment fits into your budget without forcing you to pay other bills. For example, see if you can reduce discretionary spending to free up more money for student loan repayments.
Set up automatic payment
Consider setting up your student loans for automatic payments. This can help you block automatic payment discounts that may be offered to you while helping you avoid missed or late payments.
Student loan repayment options
Federal student loans will be subject to a standard 10-year repayment plan unless otherwise specified by you with your loan officer. With that in mind, you should research other plans to make sure you have the best option for your needs. Many federal student loan repayment plans will allow you to repay your loans for up to 25 years, and you may get a lower monthly payment if you repay over a longer period.
As you begin to repay your student loan, you might consider asking about:
- Income Oriented Repayment Plans: Although income-based repayment plans extend your repayment period by 10 to 15 years, they are a good option for lowering your monthly payments. With these plans, your payments will be set at a percentage of your Discretionary Income.
- Public service loan forgiveness: With the PSLF, borrowers who work full-time for eligible public service employers can repay their loans on an income-based repayment plan for 10 years before having their remaining balances forgiven.
- Extended repayment plan: The Extended Repayment Plan sets a repayment term of 25 years, with payments that can be fixed or incremental. Direct loan borrowers must have at least $30,000 in direct loans to qualify.
- Graduated repayment plan: Borrowers who expect regular salary increases can benefit from the Graduated Repayment Plan, which starts student loan repayments low and gradually increases them over time.
Federal and private borrowers may also consider refinancing to take a different repayment path, although this is generally only preferable for private loans. Refinancing replaces your existing loans with a new one, and it’s a way to get a lower interest rate or a different repayment period.
Ultimately, finding the right payment plan for your student loans will make keeping track of payments much easier. Research your repayment options early in the process and don’t settle until you find a plan that suits your needs and budget.