Tips For Repaying Your Student Loans

Whether you are still in school, just graduated or have already started repaying your student loans it is important to stay on the right track with your student loans. That means avoiding fees and extra interest costs, keeping your payments affordable, and protecting your credit rating.  Check out the tips below to help you stay on top of your student loan repayment.  Remember, student loan repayment is your responsibility and you are your own best advocate!

  1. Know How Much You Owe: It’s important to keep track of the lender, balance, and repayment status for each of your student loans. If you’re not sure, ask your servicer or visit for all federal loan amounts and lenders.  Alternative loans are not listed.  For those, try to find a recent billing statement and/or the original paperwork that you signed. Contact your school if you can’t locate any records.
  2. Know When You Have to Pay: Different loans have different grace periods. Once your grace period has ended monthly payment is required. The grace period is six months for Federal Direct loans and nine months for Federal Perkins loans. For Federal PLUS loans, it depends on when the loan was issues.   The grace periods for private student loans vary, so consult your paperwork or contact your lender to find out more. Don’t miss your first payment!
  3. Talk To Your Lender: Whenever you move or change your phone number or email address, tell your lender right away. Open and read every piece of mail – paper or electronic – that you receive about your student loans. Don’t ignore your lender!  If they are calling it’s for a reason. Ignoring bills or serious problems can lead to default, which has severe, long-term consequences.
  4. Find the Right Repayment Option: Federal loans will enter repayment under the standard 10-year repayment plan. The standard plan is the cheapest option as it offers 120 equal monthly payments.  If you find these payments are too high other options may work better. One important option for student loan borrowers is the income-driven repayment plan which bases your monthly payment on your monthly income. To find out more about Income-Based Repayment and related programs and how they might work for you, visit
    • Private loans are not eligible for federal repayment options however, the lender may offer some type of forbearance, or you may be able to make interest-only payments for some period of time. Read your original private loan paperwork carefully and then talk to the lender about what repayment options you may have.
  1. You have Options: If you’re having trouble making payments because of unemployment, or other unexpected financial challenges, remember that you have options for managing your federal student loans. There are ways to change your loan payment date or temporarily postpone your federal loan payments through a deferment and forbearance. Speak with your loan servicer for advice on the best option for your situation.
  2. AVOID DEFAULT! Ignoring your student loans has serious consequences that can last a lifetime. Not paying can lead to delinquency and default. For federal loans, default kicks in after nine months of non-payment. When in default, your total loan balance becomes due, your credit score is ruined, collection fees are added, and the government can garnish your wages and tax refund to make payments toward your loans.
    • For private loans, default can happen much more quickly and can put anyone who co-signed for your loan at risk as well. Talk to your lender right away if you’re in danger of default. You can also find helpful information at
  3. Pay Extra If You Can: If you can afford to pay more than your required monthly payment, either once in a while or every payment, you can lower your total amount paid. Even during periods of deferment or forbearance making an interest only payment can help dramatically.
  4. Pay Off the Highest Interest Loans First: If you’re considering paying off one or more of your loans ahead of schedule, start with the one that has the highest interest rate.
    • If you have private loans in addition to federal loans, start by paying extra on those first, since they almost always have higher interest rates and lack the flexible repayment options and other protections of federal loans.
  5. Loan Forgiveness: There are various programs that will forgive all or some of your federal student loans if you work in certain fields or for certain types of employers. Speak with your servicer before repayment to ensure you start on the right path to loan forgiveness or to inquire about the  necessary requirements to begin one of these programs.


The chart below should give you an idea of the starting salary you will need to repay various levels of student loan debt. The chart assumes a fixed 4.29% interest rate and a ten year Standard Repayment Plan. It also assumes that you will be using 10% of your income for student loan repayment.

Amount Borrowed Monthly Payment Estimated Income
$3,500 Minimum $50 $600
$5,500 $56 $6,720
$10,000 $103 $12,360
$12,000 $123 $14,760
$17,500 $180 $21,600
$19,500 $200 $24,000
$25,000 $257 $30,840
$27,000 $277 $33,240
$30,000 $308 $36,960
$40,000 $411 $49,320
$50,000 $513 $61,560



Important Repayment Terms

Deferment: A deferment allows you to defer or postpone your scheduled monthly loan payments. Deferments may apply to PLUS loans, Federal Consolidation Loans, and Federal Direct loans.

Deferments last for different amounts of time. If you have already received a prior deferment, you may qualify for the same one again. In some cases, if you have exceeded the time limit on a particular deferment, you may no longer be eligible to apply for the same deferment.

During the deferment period, the federal government will pay the interest on subsidized loans. If you have an unsubsidized loan, you can save money by paying the interest at regular intervals; otherwise, the interest will be added to the loan principal.

Forbearance: If a borrower does not qualify for a deferment, they may request a forbearance. A forbearance allows the temporary reduction or postponement of the principal payments for periods of up to one year at a time. Receiving a forbearance is not automatic, however. You must apply for a forbearance in writing through St. Olaf or the agency that St. Olaf employs to service your loan. You must supply documentation to support your request for a forbearance. You will also have to continue your payments until you are notified that your forbearance has been granted.

*IN CASES WHERE A FORBEARANCE AGREEMENT IS REQUIRED, the borrower and lender must agree to the way in which the interest accruing during the forbearance will be paid.

Cancellation: Loans will be canceled in the event of the borrower’s death or if the borrower becomes totally and permanently disabled after the loan is distributed.

Much of the information on this page came from The Institute for College Access and Success.