Loans
September 4, 2018

School’s starting: Follow These Steps To Stay On Top of Your Student Loans

Written By Mary Beth Eastman
Last updated January 17, 2019

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Most college students rely on loans to help them pay tuition. Eventually, borrowing money means that you have to repay the amount plus interest and other fees. Follow these five steps to stay on top of your student loans.

Full-time students may find it difficult, or impossible, to work jobs during semesters. If you don’t have an income source, then you may feel tempted to borrow more money than you need to pay for tuition and other necessary expenses.

Pay close attention to how much you borrow on your student loan, and try to keep the amount as low as possible.

As of the 2018-2019 school year, the federal government charges a 5.05% interest rate. Private student loans can have fixed interest rates from 5.25% to 14.59% Variable rates range from 3.69% to 12.99%.

Compare interest rates from several student loan providers and read online loan reviews, such as this review of Lendkey’s education options. You never know when you might find a lender that’s willing to give you a lower rate. Even saving 1% will make it easier for you to repay your loans after graduation.

If you have student loans from the Department of Education, then you get to choose between several repayment options, including:

  • Standard Repayment Plan
  • Graduated Repayment Plan
  • Extended Repayment Plan
  • Income-based Repayment Plan
  • Income Contingent Repayment Plan (ICR)
  • Income-sensitive Repayment Plan

Ideally, you’ll choose the Standard Repayment Plan so you can eliminate your debt within 10 years. If you face financial hardship after graduation, though, use a student loan repayment plan that works for your budget. Keep in mind, though, that the longer it takes to repay your loan, the more money you will spend overall, due to interest.

Student loans typically require monthly repayments. Missing a payment could result in additional fees. It could also harm your credit rating.

Make sure you always send in payments on time to avoid these and other financial punishments.

Setting up recurring payments ensures that you never send in a late payment. You should, however, keep a close eye on your recurring payments. They’re still your responsibility. If a payment doesn’t go through (either because you lack enough funds to cover the payment or your payment processor makes a mistake), the lender will hold you responsible.

With today’s high tuition costs, you’ll probably need to borrow some money while earning your college degree. Follow these steps to eliminate your student loan debt as quickly as possible and avoid negative repercussions from late payments.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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