The first step in paying back student loans is to understand them. At Central Scholarship, we ask students to document their student loans and keep track while they are in school. Know your interest rate, servicer, repayment period, and how much you owe. Start by logging into the National Student Loan Data System for Federal loans, and to AnnualCreditReport.com for private loans. Create a spreadsheet with details for each loan, such as loan program name and servicer, servicer phone number and web site, amount received, repayment start date, and monthly payment amount. And always document any contact with your servicer.
Next, develop your plan and stay the course. Research your repayment options and decide which option is best for you. Pay attention to detail. Create a budget. Repayment plans for federal loans include Standard, Graduated, Extended, Income-Based, Income-Contingent, Pay-As-You-Earn, and Income-Sensitive. You can also consolidate your Federal loans, but only once. The federal Consumer Financial Protection Bureau has a great tool to help you understand your options and find your best option.
Finally, always pay on time, start repaying before your grace period ends, never miss a payment, and sign up for auto debit (which often comes with a discounted interest rate). For more tips on student loan repayment, attend our annual College Cash seminars. In 2015, we offered free sessions on topics covering paying for college, repaying student loans, and advice for parents. In August, Central Scholarship will pay down the student loan debt of one or a handful of students at the Student Awards Ceremony. To learn more, read about our Student Loan Pay-Down.