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How (and When) to Start Paying Off Student Debt

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You may be done with all-nighters and term papers on graduation day, but your student loan repayments are just beginning. Consider these steps to help you navigate the repayment process:

Step 1: Create a student loan inventory

Make a list of your student loans, and note the principal and the interest rate for each to determine exactly how much you owe.

Step 2: Select a payback method

You can build momentum with the debt “snowball” approach, for example, where you pay off your student loans one at a time in full, starting with the smallest debt and working your way to larger balances. You can also try the “avalanche” strategy, where you tackle the loan with the highest interest rate first.

Tip: Remember to make at least the minimum payment across the board to stay in your lenders’ good graces.

Step 3: Pay extra

Put extra cash each month toward the principal for the loan you’re trying to pay off. If you have the wiggle room, send in a payment once every two weeks—instead of once a month—to shrink the life of your loan and save on interest.

Step 4: Know when to hit the brakes

Sometimes your student loans may need to take a backseat. If you have another debt with a higher interest rate, such as a credit card, you may want to use extra funds to pay it off first.

Step 5: Look for alternatives

If you’re stretched thin financially, check to see if you qualify for an alternate repayment plan offered for graduates with federal student loans. In one such plan, called “Pay As You Earn,” your loan payments will change based on your salary, never exceeding 10 percent of what the program defines as your discretionary income.


This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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