Your grace period’s over — here’s how to deal with student debt

Student loan debt is an extremely common problem — 7 in 10 college graduates now leave school with student debt, with the average outstanding balance at $34,144, up 62 percent over the last 10 years.

And dealing with student loan debt is no easy task.

From the confusing paperwork, to the multiple types of repayment plans, to different interest rates and loan servicers, figuring out how to repay your student loans can be a literal headache.

To help college graduates get their feet on the ground before having to repay their loans, federal Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans have a six-month grace period before payments are due. PLUS loans do not have a grace period.

However, interest continues to accrue on these loans during that time.

Student loan grace period over for May graduates

Unfortunately, since it’s now been six months since May college graduates left school, it’s time for them to confront the reality of paying off their student debt.

The end of the student loan grace period means that students will start receiving bills from their student loan servicers. Note that you may have loans from multiple servicers, so keep an eye out for all paperwork related to student loans.

This video from CNBC explains the first steps you need to take to take control of your student debt.

When you begin repayment, your loan servicer will automatically put you on a standard repayment plan, but you don’t have to stick with that if it’s more than you can afford.

It’s crucial to make sure you stay on top of your student loan bills and make payments on time. Defaulting on your student loans can hurt your credit score and could lead to garnished wages — or even arrest.

Alternative repayment plans offer extended repayment terms and lower monthly payments. You want to choose a repayment plan that allows you to stay on top of your payments — you can always pay more than the minimum amount due, but paying less can hurt you.

Be sure to contact your loan servicer ASAP if you want to switch to a different repayment plan. The federal repayment calculator can help you figure out which repayment plan to choose.

Pay student loans as soon as you can

It’s important to note that you don’t need to wait until your grace period is over before making payments on your student loans.

In fact, you should make payments as soon as you can, and ideally while you are still in college, if you have unsubsidized loans. These loans accrue interest from the moment you take them out, which adds to your debt burden over time.

And they continue to accrue interest during your grace period, so don’t wait to receive a bill to begin repaying them.

To begin repayment before receiving a bill you’ll need to contact your loan servicer. Visit My Federal Student Aid to view information about all of the federal student loans you have received and to find contact information for the loan servicer or lender for your loans.

Our student loan repayment experts help borrowers get on the best repayment plan for their situation and repay their student debt faster. If you want personalized help choosing a repayment plan and figuring out how to pay off your student loans, don’t hesitate to call us at 1-888-234-3907 or send us a confidential message.