4 Steps to Start Paying Back Your Student Loans

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shutterstock_44454148It’s officially fall, which means it’s that time of year for pumpkin-flavored everything, changing leaves, dropping temperatures and ending Grace Periods. That’s right – if you’re one of the millions of recent college graduates who borrowed money to help pay for school, you’re likely coming up on the end of your student loan grace period. Your grace period – the period of time after you graduate or leave school and before you have to begin repaying your loans – is an important after-graduation milestone and it means you’ll be entering your official repayment period for your outstanding student loans.

If you’re faced with thousands of dollars in debt, you might be panicking and asking yourself, “How the heck do I even start to pay back my loans?” While your total debt burden may seem overwhelming, there are strategies to help make the debt repayment process more manageable, especially if you have federal student loans. Here’s are the steps to start tackling your debt after your grace period ends:

Know your loan servicer. You’ll be making your student loan payments to your loan servicer, and each servicer has its own payment process. Be sure you’ve identified who will be managing your student loans before repayment begins; it could be the federal government, a third-party federal student loan servicer or a private lender. Regardless of who is managing your loans, stay in touch, reach out if you have questions and begin your loan payments even if you don’t receive a bill.

Choose your repayment plan carefully. After your grace period ends, you should also pick a repayment plan. The amount you pay and the length of time it takes to repay your loans will vary depending on your repayment plan, so be sure to review all of your repayment options before selecting your repayment strategies. If you are not earning enough money to cover your anticipated student loan monthly payment on your federal loans, you may qualify for an income-based repayment plan.

Set up recurring payments. If possible, set up automatic monthly payments to your student loans if so you don’t forget to make a payment. Be sure you know what your minimum monthly payment is on your account and that you’re meeting that minimum every month. If there are months where you can afford to pay more than the minimum, go for it – the more you pay back today, the less interest will accrue over the lifetime of the loan.

Communicate issues to your loan servicer. If your monthly student loan payments become unmanageable or your financial situation changes, consider alternative repayment strategies like income-based repayment or forbearance. Depending on your situation, you may qualify for delayed repayment options like consolidation, forbearance or deferment on your federal loans. If you simply cannot meet your minimum monthly payment and are falling behind on your student loan payments even after considering alternative repayment strategies, be sure to contact your loan servicer. Explain your situation and review your options with your lender; they may be willing to offer you temporary relief.

Keep in mind the steps above and the repayment options at your disposal. Whatever you do, don’t completely ignore your debt – you could wind up defaulting on your debt, which could put your financial future at serious risk.