Your grace period exists to help you prepare to pay your student loans after leaving school. So, before your student loan grace period ends, get your finances in order and get into a student loan repayment plan.
You can prepare to make your first payment on your education loans by:
Setting up a household budget
Saving money during your grace period (or even while you’re in school)
Looking for an employer who offers loan payment assistance benefits
Enroll in an income-driven repayment (IDR) plan (PAYE, REPAYE, income-based repayment, or income-contingent repayment)
A student loan repayment plan is crucial if you need payments to be calculated based on your income. Otherwise, your student loan payment amount will be based on a standard 10-year repayment term and may be more than you can comfortably pay right out of college.
To get an idea of your monthly loan payments, use the Department of Education’s Loan Simulator.
The Repayment Estimator will estimate your monthly payments using your:
Not only does this tool review all of your repayment options, but it can also help you decide whether you can afford to repay your federal student loans in 10 years or if you need to use an income-driven repayment plan to lower your payment.
You may be eligible for income-driven repayment even if you’re self-employed.
Private lenders don’t have a tool like this.
That’s because private student loans typically don’t offer variety in repayment plans. You either make:
If your payment is too high, you might consider trying a private student loan settlement. You may be able to drastically lower your payments with a structured settlement.
Don’t miss payments or allow your student loans to go into default unless you’re planning a strategic default with the advice of a student loan professional. If you don’t pay your student loans, interest capitalization and late fees will continue to increase your loan balance.
Student loan default can impact your credit score, ability to buy a house, or eligibility for other lines of credit (such as for a car loan or credit cards).