Student Loans: What to Do After Graduation

When you are in school, student loans can feel abstract. You sign the paperwork, classes begin and the money covers tuition, books or living costs. After graduation, those loans become very real as payments come due.

Feeling anxious about that first bill is normal. The important thing is to know your options instead of avoiding the topic. With the right information, you can choose a path that fits your income and goals instead of guessing.

Step 1: Know Exactly What You Owe

Before you make any decisions, gather the full picture. You need to know:

• Whether your loans are federal, private or a mix of both
• Who your loan servicers are
• Your total balances and interest rates
• When your first payments are due

For federal student loans, you can find this information by logging into the official site of the U.S. Department of Education: studentaid.gov. There you can view your loans, servicers and repayment options in one place.

For private loans, you will need to review emails, paper statements or your lender websites directly to confirm details.

Step 2: Understand Your Grace Period

Many federal loans offer a grace period, often about six months after graduation, leaving school or dropping below half time enrollment. During this grace period, you are usually not required to make payments.

Some loans still accrue interest during this time. Others may not. Private loans may or may not offer a grace period at all. This is why checking your specific loan terms is important.

Use this grace period wisely. It can be a valuable time to:

• Create your first post school budget
• Build a small emergency buffer
• Explore different repayment plans
• Get clear on your monthly payment amount

Step 3: Compare Your Repayment Plan Options

Federal student loans offer several repayment plans. The right one for you depends on your income, other bills and long term goals.

Standard Repayment

This plan spreads your payments over ten years with a fixed monthly amount. You usually pay less in total interest on Standard compared to most other plans, but the monthly payment can be higher.

Graduated Repayment

With Graduated Repayment, your payments start lower and increase every few years. This can help if you expect your income to grow as your career develops.

Income Driven Repayment (IDR)

Income driven plans adjust your payment based on your income and family size. For many borrowers just starting out, this can bring payments down to a more realistic level. In some cases, payments can be as low as zero dollars if your income is very low.

Choosing a plan is not permanent. You can often change plans later if your income, family situation or goals change.

Step 4: Explore Forgiveness and Relief Options

Federal loans may qualify for different types of forgiveness or cancellation over time, depending on your career path and repayment history.

Public Service Loan Forgiveness (PSLF)

PSLF is designed for people who work full time for government or qualifying nonprofit employers. If you make 120 qualifying monthly payments on an eligible repayment plan while working in qualifying employment, the remaining balance can be forgiven under current rules.

Income Driven Repayment Forgiveness

With income driven plans, any remaining balance may be forgiven after 20 to 25 years of qualifying payments, depending on the specific IDR plan.

Other Programs

Some teachers, nurses and other professionals may qualify for targeted programs. The details change over time, so it is important to review the latest information on official sites like studentaid.gov.

The Consumer Financial Protection Bureau also offers guidance on student loans, repayment options and borrower rights at consumerfinance.gov.

Step 5: Adjust Your Budget Before Payments Start

A student loan payment is essentially a new monthly bill. Planning for it before it arrives helps prevent surprises.

To make room for the payment in your budget, you can:

• List your current monthly expenses and income
• Identify subscriptions and recurring charges you no longer use
• Temporarily reduce dining out, entertainment or impulse spending
• Build a small emergency buffer, even if it is only a little each month

A flexible rule of thumb many people use is a 50-30-20 style framework: 50 percent of your income for needs, 30 percent for wants and 20 percent for savings and debt payments. You can adjust these percentages based on your situation.

Step 6: What To Do If You Cannot Afford the Payment

If you run the numbers and still cannot see how to make the payment, you are not out of options. The key is to act early rather than ignoring the problem.

Contact your servicer

Explain your situation and ask about:

• Income driven repayment
• Temporary forbearance or deferment
• Alternate repayment plans you may have missed

Be cautious with forbearance and deferment

These options can provide short term relief, but interest may continue to grow in the background. They can be useful tools, but they are usually not a long term solution.

Consider your whole financial picture

If student loans are only one part of the challenge and you are also dealing with high interest credit card balances or other unsecured debt, a broader debt relief strategy may be needed.

Final Thoughts

Student loan repayment can feel complicated, but you do not have to figure everything out in one day. Start by understanding what you owe, explore the repayment plans available to you, check if you qualify for forgiveness and adjust your budget slowly to make room for the payment.

There is no one perfect path that fits everyone. The right plan is the one that helps you move forward without ignoring the rest of your life. If other debts are making that feel impossible, it may be time to look at relief options that support your overall financial health, not just your student loans.