The National Center for Education indicated in 2008 that two out of three college students have some type of student debt after graduation. Debt can impact your ability to save money and pay your bills. The longer it takes to pay down the student loans, the more money you'll be spending on interest. Though repayment plans are available that let you pay small amounts of money over many years, in the end it's better to pay off your loans as quickly as possible, even if it means sacrificing some luxuries.
Grace Period
After you graduate, you will have a grace period on your loans. During this period, which is usually about six months from the day you graduate, interest will not be charged on your loans and you will not be required to make payments. Attempt to put as much money as you can into your student loan payments before interest begins being added. Consider using any graduation gifts or employment sign-on bonuses to pay off your loans.
Repayment Plans
Life is unpredictable and you never know what might happen next. Select a low repayment plan and then put more money than the minimum on your loan each month. Using income-based or graduated repayment plans ensure that your necessary payment is low, in case you get into some kind of financial difficulty. Adding more money than required to your loans, though, will save you from high interest rates over the years.
Consolidate
It can be difficult to make multiple payments each month, especially if you have many different loans to many different companies. By consolidating, you can lock in one interest rate and create one payment, saving yourself money every month. Consolidation is the process of lumping all your loans into one large loan. You can consolidate government loans through the Department of Education. (See the Resources section.) Check to be sure that you're getting a better interest rate on the new, bulk loan before signing anything. Going down even a few percent on your loans can save thousands of dollars over the years.
Forgiveness
You can qualify for loan forgiveness if you work in certain fields. These include: teaching in low-income areas, federal service, nursing or volunteering with AmeriCorps. Some programs forgive a percentage of your loans for every year of service. The Public Student Loan Forgiveness program forgives your loan after 10 years of service and steady payments. It is only eligible on direct student loans. (See Resources section.)
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