Below are some tips for managing the repayment of student loans after graduation.
Estimate Your Income
- Research entry-level jobs in your chosen field and expected location.
- Bureau of Labor Statistics Occupational Outlook Handbook.
- Google job postings in the area you plan to live.
- Calculate net income after taxes and deductions here.
Create a Budget
Here are some basic budget categories you should consider when creating a budget.
- Health Insurance
- Phone
- Car Insurance
- Rent/Mortgage/Property Taxes
- Utilities
- Food
- Car Payment
- Gas
- Personal Supplies (Makeup, Haircuts, Clothes)
- Medical Expenses/Copays
- Entertainment
- 401 K/IRA/Retirement Plan Contribution
- Credit Card Debt
- Internet Costs/Cable Costs
- Furniture/Household Furnishings
- Emergency Fund Contribution
Afford Your Monthly Payments
Know Who You Owe and How Much You Owe
- Federal Student Loans
- Private Loan Payment Calculator
Choose Payment programs
- Federal Loan Repayment
- Compare your budget and your estimated federal loan payment.
- Choose standard payment if you can afford it.
- If you can’t afford standard payment, recalculate and choose Income Based/Contingent or Graduated repayment options to lower your monthly payments.
- Private Loan Repayment
- Compare your budget and your estimated private loan payment.
- Look at areas in your budget that you can reduce to afford your private loans.
- If you can’t cut your budget, contact your private loan servicer and ask them what reduced payment options exist.
- Consider Consolidation
- Worst Case Scenario (if you still can’t afford your payments) - Last Resort
- Don't Panic: Contact Your Lender About
- Reduced Payments
- Deferment
- Forbearance
- Don't Panic: Contact Your Lender About
Consider Graduate School as an Option
- Postponing graduate school for 1-2 years can allow for paying down debts and exploring details about your field.
- Going to graduate school right away allows you to defer your loan payments until after you are done with graduate school.
Strategize Repaying Debt
- Pay smaller loans or higher interest loans first.
- Find a financial advisor to help guide you in your payment strategy.
- Make sacrifices to pay off debt sooner.
- Consider your long-term goals when choosing what to sacrifice.
Explore Loan Cancellation/Forgiveness Opportunities
- If you work in certain fields, such as teaching, nursing, healthcare, or for a non-profit institution, you may be eligible to have any remaining federal loan debt canceled after 120 on time payments. See these pages for additional information:
- Some employers will pay a portion of your debt, so do not be afraid to ask potential employers about whether or not they offer this benefit.
- If you have any interest in military or peace corps, there are additional loan forgiveness options available. Contact the branch you are considering directly, but thoroughly research requirements/lifestyle before deciding on this path. It's a huge commitment.