{"id":199037,"date":"2015-09-03T04:00:25","date_gmt":"2015-09-03T11:00:25","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=199037"},"modified":"2023-10-02T15:06:17","modified_gmt":"2023-10-02T21:06:17","slug":"how-to-start-paying-student-loans-best-practices-guide","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/how-to-start-paying-student-loans-best-practices-guide\/","title":{"rendered":"How to start paying student loans – best practices guide"},"content":{"rendered":"

[This is the first installment in a series examining repaying student loans. Part II will discuss an alternative payment plan, Revised Pay As You Earn or REPAYE<\/a>.]<\/em><\/p>\n

As someone who started off her debt reduction journey on Get Rich Slowly with some pretty astronomical student loan debt<\/a>, I’ve learned the hard way about the repayment process. And with school starting up again and many feeling tempted to borrow, I wanted to share some of that retrospectively gained wisdom.<\/em><\/p>\n

A staggering number of college grads start their careers with student loan debt, and many of them struggle to get ahead as a result.<\/p>\n

But whether you’re just starting your college journey or you’re a recent graduate with monthly payments looming on the horizon, here’s what you need to know about how to start your student loan repayment off right.<\/p>\n

<\/span>Reduce your overall debt<\/span><\/h2>\n

If you’ve already graduated, there’s no way to go back in time and borrow less money. But, if you’re still in school, then this is the tip to take to heart: Don’t borrow more than you need while in school.<\/em><\/strong> The less you borrow as an undergraduate, the less you’ll have to pay back later.<\/p>\n

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If you’re contemplating a graduate degree, read how to minimize your grad school debt<\/a>.<\/p>\n

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Yes, a new computer, a car, travel, and other aspects of lifestyle inflation<\/a> may be calling you, especially when the money’s so easy to come by. However, living frugally while you’re a student means being able to use more of your hard-earned money later, whether it’s to build your savings account<\/a> to buy a house or meet other financial goals. Don’t put yourself in a situation where you’ll be a slave to your former lifestyle.<\/p>\n

<\/span>Know how much you owe<\/span><\/h2>\n

Since borrowing happens incrementally over several years, all too many graduates have no idea how much they owe. Additionally, since the originator of your loan (who cut you the check) may not be the same entity as the servicer (who you make payments to), and since servicers can sell loans to other servicers, knowing who you owe how much to can be tricky.<\/p>\n

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Here’s how to find out how much you owe<\/strong>
\nEnter the Department of Education’s National Student Loan Data System (NSLDS). This system will tell you about Title IV loans and grants that you were awarded.<\/p>\n

If you acquired non-Title IV loans (i.e., private loans), they may not be listed on the site, so make sure you track those down as well. Servicers will find you if you don’t find them, but you don’t want things to get to that point! Plus, having all the information at your fingertips can help you plan your repayment strategy.<\/p>\n

<\/span>Pick a repayment plan<\/span><\/h2>\n

The default repayment plan is the standard plan, in which you have a fixed payment<\/em>, or in other words, you pay the same amount each month for 10 years. However, other plans are available, and something else may be a better fit for your circumstances. Repayment plans for federal loans also include:<\/p>\n