5 tips for paying back student loans

By Olivia Rasmussen
11/20/2015
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Since graduating in May, the idea of paying back student loans has honestly terrified me, even though I’ve been pretty responsible about researching and organizing all my information. But the more I dug into the world of student debt, the more questions and concerns I seemed to have. Should I start repaying my student loans before or after the grace period? How much should I pay each month? Where and to whom do I even pay? Here are some helpful tips I’ve picked up along the way that can hopefully ease the stress of student loan repayment.

1. Get to know your student loan servicer

Know your loan servicer

While in school, I was receiving emails from a third-party organization giving me my quarterly interest statements for my loans. So, as any typical college student would do, I gave them a quick look and forgot about them. Turns out, these emails were from my loan servicer, one of several third-party organizations hired by the federal government to handle student debt and the student loan repayment process. All federal loans are repaid through these third-party organizations. Surprise! They’re the ones you’ll be making those checks out to.

2. Start paying back student loans early to reduce interest

If you have unsubsidized loans, interest started accruing the minute you took out those loans — and will accrue a significant amount of interest by the time the grace period ends. Waiting until the end of your grace period to pay everything back will only result in paying larger chunks, as interest will start accruing on top of the interest that built up while you were still in school. So, paying off a little bit of interest during your grace period, even if it’s just $20 here and there, can reduce your student loan repayment in the long run.

3. Sign up for automatic withdrawal

Automatic withdrawal for student loan repayment

Once you start making payments on your loans, signing up for automatic withdrawal with your loan servicer could drop your interest rates and save you money. And, it also ensures you never miss a student loan repayment. It’s a win-win!

4. When to consolidate student loans

If you took out several student loans and are making multiple payments, loan consolidation may be your stress savior. Consolidating your loans turns multiple payments into one, and can also reduce your monthly payment by giving you up to 30 years to pay back your student loans. But consolidating your loans is not a step that should be taken lightly. Over time, it can increase the amount of interest you pay and can also reduce some borrower benefits and cancellation options. So if you’re overwhelmed by your various monthly student loan payments and want to simplify, consolidating could be a great option, but definitely do your homework!

5. Expert advice is available for free

Call a student loan repayment expert

At the end of the day, if you’re still confused about your student debt, I would highly recommend meeting with a loan specialist at your college and/or calling the customer service of your loan servicer. While calling your servicer’s customer service may seem like a waste of time, it’s not. They were able to answer all of my questions. If you don’t know what questions to ask, but you just want the low-down on paying back student loans, these are the people to talk to! It’s their job to ensure students understand their loans and are able to pay them back.

If you're considering refinancing or consolidating your student loans, check out our LoanFinder.

All images courtesy of Giphy.

About the author

Olivia is a recent graduate from Lewis & Clark College, where she studied international affairs. She is currently working as a preschool teacher in Portland, OR, but hopes to soon travel and explore the world. She loves animals, aerial circus arts, and outdoor adventuring.

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