How To Start Paying Back Your Student Debt (2024)

Orginally Posted October 18, 2018
0 Comments
Finance

By Staff

When you are at college, you tend to forget about the debt that you are going to have to deal with once you graduate as you have a lot of other things to focus on. Of course, at some point, you are going to graduate, and you are going to have to think about how you are going to manage your debt. In this article, we are going to give you some tips on how you can start paying back your student debt. Keep reading if you’d like to find out more about this.

Have A Student Bank Account

Before you even graduate, you should make sure that you are using a student checking account to store your money. This will help you to save a little more over the years as you will have fewer fees and interest to deal with. You might even find that some banks will let you continue to use your student bank account for a few months after you graduate until you get back on your feet. Do your research and you should see what your bank has to offer.

Find A Payment Plan

The good news is that you don’t need to start paying back big chunks of your student debt back immediately, you have some time to find the right payment plan for you. Take a look at the different options and figure out how much you can afford to pay each month. This figure might change once you have secured your first graduate job so don’t forget to alter this when you can afford to pay a little more.

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Create A Budget

Getting your first graduate job might be exciting and you’ll probably feel as though you have a lot more money to live with, but you should not think about it this way. Try to come up with a budget that you are going to stick to in order to pay back your loans in a realistic amount of time. Budgets are relatively easy to set up, the hard part is sticking to it. Don’t ignore this however as your debt will increase with time due to interest and it is better to get started right away.

Make Some Sacrifices

It can be tempting to want to start your life as soon as you graduate, to get married, have kids and buy your first house but if you want to pay off your student debt then you’ll need to think about making some sacrifices. Of course, in the future, you can do all of these things but the sooner you start paying back your debt, the better the result. Think about putting off making big purchases like a house if you want to really get stuck into your debt. Make some sacrifices and you’ll be happier in the long run with a lot less debt to deal with.

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Follow our advice if you want to start paying back your student debt sooner rather than later.

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Debt,
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Students

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FAQs

How To Start Paying Back Your Student Debt? ›

Data Summary. Student loans can take 5-20 years or longer to repay. It would take the average bachelor's degree graduate about 10 years to pay off their student loan debt if they made debt payments of $300 a month. 18 million federal student loan borrowers are on a 10-year repayment plan.

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What is the fastest way to pay off student debt? ›

Make extra payments toward the principal. There's no penalty for paying off student loans early or paying more than the minimum. ...
Refinance if you have good credit and a steady job. ...
Enroll in autopay. ...
Make biweekly payments. ...
Pay off capitalized interest. ...
Stick to the standard repayment plan. ...
Use 'found' money.

May 21, 2024

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How many years should it take to pay off student debt? ›

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How hard is it to pay back student debt? ›

It typically takes between 10 and 30 years to pay off a student loan balance, depending on your loans' interest rates, balance owed, annual income and repayment plan. Your chosen repayment plan greatly influences how long it will take to eliminate student loan debt.

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Can I start paying off student loans while in school? ›

Pay Right Away

Consider making student loan payments during your grace period or while you're still in school, even if you're not required to do so. If you can, try to pay at least enough to cover the amount of interest you're accruing each month.

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How to pay off $100k in student loans in 5 years? ›

Combine strategies for a faster payoff

Refinance student loans.
Apply for federal forgiveness programs.
Consider income-driven repayment (IDR)
Make extra payments when you can.
Explore loan repayment programs.
Apply the debt avalanche method.
Get help from your employer.
Use 529 college savings funds.

More items...

May 7, 2024

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How to pay off $40,000 in student loans? ›

How to Pay Off Your Student Loans Fast

Pay more than the minimum payment.
Get on a budget.
Cut back your spending.
Increase your income.
Refinance your loans (only if it makes sense).
Avoid income-driven repayment plans (IDRs).
Don't bank on student loan forgiveness.
Make paying off your student loans a priority.

Apr 23, 2024

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Does college debt go away after 7 years? ›

Do student loans fall off your credit report? Both federal and private student loans fall off your credit report about seven years after your last payment or date of default. You default after nine months of nonpayment for federal student loans, and you're not in deferment or forbearance.

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Why are student loans so hard to pay off? ›

Interest can make student loans more expensive, while inflation can make that debt harder to manage alongside other bills. Paying off some of your debt during your studies could ease the burden later on and save you money on interest.

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What is the average student debt? ›

Average student loan debt is $1.73 trillion as of the third quarter of 2023, with 85% being federal loans. Among all student loan borrowers, average debt at the time of graduation is $29,400. Average student debt varies by state, with Utah's being the lowest and New Hampshire's the highest.

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What happens if you never pay student debt? ›

If you default on your student loan, that status will be reported to national credit reporting agencies. This reporting may damage your credit rating and future borrowing ability. Also, the government can collect on your loans by taking funds from your wages, tax refunds, and other government payments.

Who owes the most student debt? ›

Black women owe a disproportionate amount of student debt. They hold 43% more undergraduate debt and nearly 99% more graduate school debt than their white woman counterparts 12 months after graduation, according to an April 2022 study by the nonprofit organization The Education Trust.