Student loan advice

Here are some tips that can save students headaches and money, whether they’ve just finished school or are already paying off student loans.

Get to know your loans Do you have federal or private loans? What are your interest rates? It's important that you keep track of the loan type, lender, balance and repayment status for each of your student loans. These details determine your options for loan repayment. If you’re not sure what kind of loans you have, visit the National Loan Data System at www.nslds.ed.gov to see federal loans, or contact your school. 

When is the first payment due? Different loans have different grace periods (how long you can wait after leaving school before making the first payment). For federal PLUS loans, it depends on when they were issued. The grace periods for private student loans vary, so consult your paperwork or contact your lender to find out. Don't miss your first payment, and if you can, begin paying your loans early, if you want to start reducing your balance before the interest kicks in. 

Put yourself on a budget Live within your means by prioritizing expenses and spending only what you can afford. Document monthly income and living expenses. Make sure you have enough income to cover “needs” before “wants.” 

Consider setting up automatic payments. Missing payments can quickly get you into financial trouble. Pay on time all the time. Setting up payments automatically through your bank account will dramatically reduce the chances of missing a payment. 

Don’t increase payment period if possible Interest charges can add up quickly. If possible, pay off your loans within the standard 10-year period. Repayment programs that defer or lower payments will reduce your monthly payment, but you will pay over a longer period of time and your balance will be larger. 

Pay off loans with the highest interest rates first You won't get penalized for paying off a student loan early. Consider using extra cash to pay down loans with the highest interest rates first. This strategy can save you big dollars in interest. 

Explore your repayment options If you are having trouble making loan payments, make sure you understand your repayment options. Deferment and forbearance temporarily stop payments, but interest continues to accrue and the loan balance continues to grow. Several repayment programs are available for federal loans. Programs for private loans can vary by lender. Loan consolidation is an option, but be sure it’s the right option because you can only consolidate one time. And never consolidate federal loans into a private loan.