3 Helpful Student Loan Tips for Recent Graduates

Graduating college is not only a huge milestone in one’s life, but a moment that is filled with eager excitement for what’s to come next. While life is full of surprises, especially after school, one thing is for certain if you’ve borrowed money for your education- your loans will become a big part of your life until they are resolved.

With tuition costs rising every year, students are often forced to adapt a “college by any means necessary” approach to their secondary education; and we aren’t even including additional expenses for books, rent, parking, and meals! This causes a mad rush to secure financial assistance, sometimes to the detriment of fully understanding the small print in loan agreements and interest rate explanations.

Experts suggest that you try to keep your post college debt under your realistic first year salary expectation. While that’s a first step, there’s much more to solving the puzzle that is student loans. Here are a few more helpful tips to assist you in obtaining post collegiate financial freedom by quickly repaying your loans.

1. Know Your Loans and Their Grace Periods- It is pivotal to start your repayment process on the right foot with extreme organization, so be sure to keep track of the lender, balance, and progression/status for each of your student loans.  Visit the National Student Loan Data System website, where you can log in to see this pertinent information for all of your federal loans; check your original agreement or most recent billing statement for this information pertaining to any private loans you may have. Since different loans have different grace periods (how long you can wait after leaving school before you have to make your first payment), you should consult these varying deadlines to come up with a proper plan of attack for your first repayments.
2. Pay Off Your Most Expensive Loans First- If you are able to put together more money than expected and are considering paying off a loan ahead of schedule, be sure to start with the one that has the highest interest rate. Eliminating the amount of time that these loans remain outstanding will be a huge help in stopping any further debt through interest. Furthermore, if you have private loans, start repaying them before your federal government ones; private loans typically have a much higher interest rate attached to them and often don’t offer the same flexible repayment options federal ones do.
3. Always Make Your Payments- While repaying your loans is far from an easy thing, it is unfortunately often a necessary evil of post graduate life. If you are foolish enough to try and ignore them, however, you can crush your financial future with serious consequences that can last a lifetime. If you don’t pay off your loans, your account can go into delinquency and eventually default. Delinquency looks bad enough on any credit report, but defaulting is far worse. When you default, your credit score not only plummets, your total loan balance also becomes due; the government can even garnish your wages and take your tax refunds if it was a federal loan that was defaulted on. Defaulting on a private loan, on the other hand, is not only often easier to do if you aren’t careful, but can also put anyone who co-signed for the loan in financial danger too. Don’t be a fool- if you get in financial trouble DO NOT just ignore your loans. Talk to your lending bank representative right away and explore your options before it is too late!