How to Manage Student Loans

Last Updated on May 23, 2023

How to Manage Student Loans

As you work to complete your college education, the responsibilities of adulthood begin to set in. The thousands of dollars borrowed for tuition loom on the horizon and the day of your first due payment rapidly approaches.

The average borrower in the college class of 2013 is likely to carry more than $35,200 in student loan debt. Knowing where to start with the process of repayment can be overwhelming. Here are five guidelines for managing the education loans that grant you access to years of schooling.

1. Work Through School

Begin by practicing good financial habits while you are in school. To develop these habits, you will need an income. If your schedule allows it, start working part-time during the school year and full-time during the summer.

Use this income to learn how to pay bills on time and in full. Whether it's a cellphone bill or car insurance, making a regular payment with your income can prepare you for the handling loans later on.

If you are able to save a portion of your earnings, you can use this after you graduate to reduce the principal of your loan, lowering the amount of interest you pay each month.

2. Track Loan Information in a Notebook

Keep track of your loan information by creating a notebook that has the totals and dates for each individual loan. If you have misplaced data on federal loans, you can go to the National Student Loan Data System website at to update your records.
Make sure you notebook includes the following data:

  • Lender name
  • How to contact lender
  • Monthly amount due
  • Total amount borrowed
  • Date of first due payment
  • Length of loan grace period

3. Save During Grace Period

Find out how long the grace periods are for your loans. Most loans come with a grace period of six to nine months following graduation or dropping below part-time attendance. During this period, you do not need to make payments. However, you may utilize this time to practice putting a portion of your paycheck into savings.

Saving money during the grace period will prepare you for having less money available to spend when the period ends, as well as allow you to build up a cash reserve to assist you in time of emergency. Having a cash reserve can prevent you from overdrawing your banks accounts, missing payments and accruing more debt.

4. Set up Automatic Payments

When it comes time to make your payments, it may be tempting to have a relaxed attitude regarding due dates. Late fees will be added to the amount you owe and it will become more difficult to make multiple payments at the same time. Instead, ensure payments are made by setting up automatic payments.

Automatic payment withdrawals save you from late payments and provide you with a discount on interest. Federal lenders offer a 0.25 percent interest reduction and private lenders offer a 0.25 to 0.50 percent reduction.

5. Find a Repayment Plan That Works

Taking steps to manage your income, organize your loan information and make payments on time may not be enough to keep your repayment schedule under control. For some, the greater struggle is trying to afford payments when other bills weigh you down. If you are having difficulty coming up with the cash to make payments every month, you may want to consider an alternative repayment plan.

The Department of Education provides students with options for extending the length of time federal loans are repaid as well as the amount owed. You monthly payment can be decreased based on the total of your loans relative to your income.

Changing your repayment plan can enable you to keep your loans in good standing even when you are undergoing financial duress.

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