Road Map To Student Loan Debt Repayment

road mapWhether you are nearing graduation or have been making student loan debt payments for a while, this roadmap provides a visual display of the road ahead from start to finish. Find your starting point and look for tips for lowering payments or finding debt relief options that could make your journey smoother.

All Aboard

First,  take a breath. You have at least 6 months before you need to begin making payments. However, don’t waste this time by spending. Instead, start budgeting for your new payment expenses and save some money as an emergency fund.

Next stop, your loan servicer’s office. Well, not necessarily an office with a physical address, but you do need to find out who is holding your loan account and their contact information. Use the National Student Loan Data System website to identify where your loans are, your balances, and how you can submit payment.

Second stop, options exploration station. There are three main payment options available: the standard repayment plan, consolidated repayment plan, and income-based repayment plan.

  • The standard repayment plan is the one you get automatically enrolled in by your loan servicer. This plan splits your loan payments up based on your interest rate averaging 6.8% over a ten year repayment period; typically resulting in hundreds of dollars per month.
  • A consolidated repayment plan will allow for all of your federal student loans to be rolled into one loan extended to a payment period ranging between 15 to 30 years; with an obvious reduction in monthly payments.
  • The income-based repayment plan adjusts your monthly payment based on a calculation derived from your disposable income and family size; typically the payment is 15% of the discretionary income per month.

As you continue along the road it is important to practice making your  payments and evaluating your ability to sustain them. If you find yourself unable to make the payments under the standard repayment plan, consider switching to the consolidated payment or requesting the income-based payment plan from your servicer.

The final stop on this journey is a zero debt balance and that takes both time and effort. Commit to a consistent payments each month by setting up automatic debits from your checking  account. Be patient with this journey and keep in touch with your servicer, you never know when you might need to negotiate a lower payment or ask for a temporary suspension in payments  due to a financial hardship.


National Student Loan Data System website:

Road map source: