5 Tips to Manage Student Loan Debt

College was a great time in my life – but as the excitement of graduation neared, my student loan debt loomed. I owed tens of thousands of dollars for my education; would I be able to afford to pay a monthly bill of hundreds of dollars each month? Would I ever be able to pay it all back?

Lots of young adults are in the same boat. According to the Federal Reserve Bank of New York, 2011 graduates with student loans owed an average of $23,300—quite a significant sum, especially at such a young age. For many young people, that debt causes a lot of stress, which can affect their physical and psychological health, too.

“Money is one of the biggest sources of stress for Americans. And when you’re young, it’s really easy to want to spend your money on pleasurable things and not commit to the things that aren’t as fun, like paying back student loans,” says Eve Adamson, author of 365 Ways to Reduce Stress.

Luckily, I was able to find a good job after graduation, but even with a steady income, juggling living expenses and student loan debt can be tricky. When my younger sister graduates from college next year, I will be able to pass on some advice.


The first step you need to take is to put yourself on a budget. The more money you can sock away each month, the more you’ll have to pay off your student loan debt. Here are some other steps from The Project on Student Debt that helped me manage my student loan debt:


Keep track of your loans. Be aware of how much money you owe. It’s important to keep track of the lender, balance and repayment status for each of your student loans. That way, you can stay on top of your debt and follow the repayment schedule you established for each loan. You can keep track of your federal loans with the National Student Loan Data System for Students. For your private loans, keep a copy of all the paperwork you receive. Also be aware of the grace period on each of your student loans, so that you can make payments on time. To get an idea of how long it’s going to take to pay off your student loans, use a student loan calculator.


Communicate with your lender. It’s important to maintain a dialogue with each of your lenders about your student loans. Part of the lender’s role is to help you establish an executable plan to pay off your loan. That means you should be working with your lender—not against—to pay off the debt. Be upfront about issues that you encounter, and your lender should help you reach a solution and avoid defaulting on your loan. Defaulting, which occurs after you fail to make payments for nine months, can ding your credit score and cause the total amount of money you owe to increase dramatically.


Adjust your repayment plan, if needed. Most student loans come with a standard 10-year repayment plan. If you don’t think you’ll be able to pay off the loan in that time frame, discuss alternative options with your lender. One potential solution for federal loans is adopting an Income-Based Repayment plan, which takes your income into consideration and can help make sure your loan payments will cost less than 10 percent of your income. Enrolling in an IBR plan can also mean that any remaining debt, after 25 years of qualifying payments, is forgiven. Talk to your lender to see if this is an option for you.


Start with the most expensive loans. Prioritize and pay off your most expensive loans first. That means starting with the loan that carries the highest interest rate (most likely, it’ll be one of your private student loans). Paying off this loan first will enable you to minimize the total interest you’ll have to pay off over time.

So, while the process of paying off your student loans can seem endless, making a plan can make it seem more manageable.

How are you handling paying off your student loans? Share your ideas in the comments below.

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