Loan Repayment Checklist
We are providing this checklist to help you keep your student loan debt under control. That means avoiding fees and extra interest costs, keeping your payments affordable, and protecting your credit rating. If you're having trouble finding a job or keeping up with your payments, there's important information here for you, too.
Know Your Loans
Know Your Grace Period: Don't miss your first payment!
Stay in Touch with Your Lender/Servicer
Budgeting for Repayment
Pick the Right Repayment Plan
Stay out of Trouble and Don't Panic
Be Aware of Scams
Lower Your Principal
Pay Off the Most Expensive Loans First
Decide Whether to Consolidate
Go to National Student Loan Data System (NSLDS) to find out who your loan servicer is and what federal loans you have. Go to your servicer’s site and create a login and password so that you can see your loan balance, repayment status, accrued interest, payment history, etc. for each of your federal student loans. If some of your loans aren't listed on NSLDS, they're probably private (non-federal) loans.
Check your credit report annually or try to find a recent billing statement and/or the original paperwork that you signed. Contact your school/s if you can't locate any records.
Make sure you know when your payments should begin.
- Federal Stafford loans: six months
- Federal Perkins loans: nine months
- Federal PLUS loans: depends on when they were issued
The grace periods for private student loans vary, so consult your paperwork or contact your lender to find out their grace period.
Contact your loan servicer whenever you move or change your phone number or email address. If you are contacted by ECMC, your servicer, lender, or a collection agency, don't ignore it—talk to them! They are trying to find out what is going on so that they can give you options and resolve problems. Ignoring bills or serious problems can lead to default, which has severe, long-term consequences.
We suggest that while you are in your grace period you put together a budget so that you can determine how much you will have available each month to repay your loans. This will help you determine which repayment option will work best for you. You may use an online budget calculator for help.
Your loan payments will automatically be based on a standard ten-year repayment plan. If the standard payment is going to be hard for you to cover, there are other plans, and you can change plans down the line if you want or need to. Extending your repayment period beyond ten years can lower your monthly payments, but you'll end up paying more interest over the life of the loan.
Important options are the income-driven repayment plans. They can cap your monthly payments at a reasonable percentage of your income each year and forgive any debt remaining after 20-25 years of affordable payments.
Private loans are NOT eligible for federal loan payment plans, deferments, forbearances, or forgiveness programs. However, the lender may offer some type of forbearance—typically for a fee—or you may be able to make interest-only payments for some period of time. Read your original private loan paperwork carefully and then talk to the lender about what repayment options you may have.
If you're having trouble making payments because of unemployment, health problems, or other unexpected financial challenges, remember that you have options for managing your federal student loans. Not paying can lead to delinquency and default. There are legitimate ways to temporarily postpone your federal loan payments, such as changing your payment plan, deferment and forbearance. But beware: interest accrues on all types of loans during a forbearance, and on some types of loans during deferment, increasing your total debt, so ask your servicer about making interest-only payments during this time if you can afford it.
If you expect your income to be lower than you'd hoped for more than a few months, check out the Income-Driven repayment plans. Your required payment with these plans can be as little as $0 when your income is very low. You may also be eligible for loan discharge.
For private loans, default can happen much more quickly and can put anyone who co-signed for your loan at risk as well. Talk to your lender or servicer right away if you're in danger of default.
Be wary of student loan assistance scams, expensive loan management services, and private debt consolidators. They say that they will help you consolidate your loans, reduce your payments, or apply for loan forgiveness—for a price. Do NOT fall for these scams. For federal loans, you can do ALL of these things for FREE. Just contact your federal student loan servicer.
When you make a federal student loan payment, it covers any late fees first, then interest, and finally the principal. If you can afford to pay more than your required monthly payment - every time or now and then - you may lower your principal, which reduces the amount of interest you have to pay over the life of the loan. Include a written request to your Servicer/lender to make sure that the extra amount is applied to your principal! Otherwise it will automatically be applied to future payments instead. Keep copies for your records and check back to be sure the overpayment was applied correctly.
You must pay something on all of your loans, but if you're considering paying off one or more of your loans ahead of schedule, or trying to reduce the principal, start with the one that has the highest interest rate. If you have private loans in addition to federal loans, pay more toward your private loans, since they may have higher or variable interest rates and lack the flexible repayment options and other protections of federal loans.
A federal consolidation loan combines multiple federal loans into one for a single monthly payment and one fixed interest rate. If this is appealing, here are some pros and cons to consider. You can consolidate your federal student loans through the Direct Loan program, and this loan calculator can help you figure out what your interest rate would be. For private consolidation loans, shop around carefully for a low or fixed interest rate if you can find one, and read all the fine print. Never consolidate federal loans into a private student loan, or you'll lose all the repayment options and borrower benefits - like unemployment deferments and loan forgiveness programs - that come with federal loans!
There are various programs that will forgive all or some of your federal student loans if you work in certain fields or for certain types of employers. Public Service Loan Forgiveness is a new federal program that forgives any student debt remaining after ten years of qualifying payments for people in government, nonprofit, and other public service jobs. There are other federal loan forgiveness options available for teachers, nurses, AmeriCorps and PeaceCorps volunteers, and other professions, as well as some state, school, and private careers.