The idea of making student loan payments might sound daunting — especially if you earn an entry-level salary or don’t have a job at all. But if you recently graduated from college, left school, or dropped below half-time enrollment, planning ahead can help you determine how to start paying back student loans.
The type of debt you have and your current income are significant factors in your student loan repayment timeline, but the following steps can help you figure out when and how to start making payments.
- See when your first payment is due
- Review what you owe
- Determine your budget
- Learn about repayment options
- Enroll in autopay
- Research advanced strategies
- Consider refinancing
Plus: What if I can’t afford my loans?
Repayment typically begins six months after graduating, leaving school, or dropping below half time enrollment. But, depending on your specific loan, you may have nine months or more before your first payment is due.
The agreement you signed should outline the terms and conditions of the loan, including when you must make your first payment. If you can’t find your loan agreement, contact your lender or loan servicer to clarify your due date.
The six-month grace period is designed to give you time to find a job before you begin payments, but you might not want to wait if you can afford to make payments right away. Repaying ahead of schedule can minimize the amount of interest you pay overall.
You probably took out your earliest loans as a first-year student — it’s no surprise if you don’t remember the details.
To retrieve federal student loan information, log into your Federal Student Aid account at Studentaid.gov. There, you can find a summary of your federal student aid, including loan amounts, types of debt, outstanding balances, and the company that manages your loans. Take note of your loan servicer, because that’s the company that can answer any questions about repayment.
To gather private student loan information, review your loan agreements or other paperwork and look for information about the lender or loan servicer. If you can’t find any documentation, your credit report will show any active loan accounts you have. Get a free copy of your report at AnnualCreditReport.com to see who owns your student loans, then contact the servicer to review your account details.
If all else fails, contact your school’s financial aid office to see if they have any records about your student loans. They may be able to assist you in finding your loan servicer details.
Look at your budget to figure out what you can afford to start paying toward student loans each month. Your potential payment amount will depend on your income, other expenses, and overall financial goals.
Start by determining your total monthly earnings after taxes. If your wages vary, use a recent average.
Once you have an idea of your income, subtract your recurring monthly expenses from that figure. Include necessities like housing, food, and insurance, along with niceties like shopping, dining out, and entertainment costs.
This will give you an idea of what you have left over to potentially put toward student loans. If that number isn’t enough to cover your minimum payments, take another look at your non-essential expenses and consider what can be reduced or eliminated.
| Tip: If you haven’t tracked your spending, a budgeting app can help you get started. Services like Mint allow you to link your accounts and automatically categorize your expenses. |
If you need to lower your student loan payments, explore alternative repayment plans.
Federal loan borrowers have many choices. In addition to Standard and Graduated Repayment, there are several types of income-driven repayment (IDR) plans available. These plans set your payment amount based on your income and family size, and any remaining balance at the end of your term can be forgiven.
| Tip: Federal Student Aid’s Loan Simulator tool can help you compare repayment plans and estimate your costs. |
Private student loan lenders generally don’t offer as many repayment options or allow you to switch plans once you’ve committed to one. However, if you know you’ll have trouble paying back student loans, call your loan servicer and ask about your options. They may be willing to work with you and help keep you out of default.
Autopay is a convenient feature offered by nearly every student lender. When you sign up, you’ll enter your bank details and permit the lender to automatically remove student loan payments from your savings or checking account. Enrolling in autopay ensures you never miss a payment (assuming you keep enough money in the bank to cover the cost).
Not only does autopay provide peace of mind, but it often lowers your interest rate, too. Federal loan servicers and most private lenders offer an interest rate discount of 0.25 percentage points.
You can typically sign up for autopay by logging into your student loan account. If you can’t find that option, call your loan servicer to ask about it. If you have multiple student loans with different servicers, you’ll need to enroll in autopay separately for each servicer.
If you can comfortably afford your loan payments and want to be debt-free as quickly as possible, review different strategies to pay off your loans fast. For example, you might be able to:
If you have multiple loans with different interest rates, consider prioritizing those with the highest interest rates first (also known as the debt avalanche method). The faster you pay down high-interest debt, the less interest you’ll pay over time.
Refinancing student loans can save you a considerable amount of money if you secure a lower interest rate or shorten your loan term. Or, you might choose to extend your loan term, lowering your monthly payment but likely costing you more in total interest over the life of your loan. Either way, the process can help you accomplish your goals and better manage your debt.
However, refinancing federal student loans comes with added risk. When you do so, you turn federal loans into privately held debt. You’ll permanently lose access to federal benefits, such as income-driven repayment, forgiveness opportunities, and other protections. Make sure you won’t need these perks before you move forward.
If you’re unemployed or unable to afford your student loan payments, take action as soon as possible. Explain the situation to your lender, who can guide you through the available options and provide assistance.
If you’re facing temporary financial difficulties, inquire about deferment or forbearance options. Both allow you to pause payments for a limited time, which can help you get back on your feet. However, interest will continue to accrue in most cases, meaning your loan’s balance can balloon while your debt is paused.
Every borrower’s circumstances are unique, so it’s essential to discuss your specific needs and explore the alternatives provided by your loan servicer.