A College Graduate's Guide to Student Loans

06/30/2015 03:08 pm ET | Updated Jun 30, 2016

Post-college graduation is the first time that many graduates will have to be financially responsible and fully support themselves. Part of that responsibility includes paying off their student loans. The average college graduate in 2015 has $33,000 in student loan debt, though many have much more to pay back. If you find yourself in this situation, here is some advice on how to be financially successful while starting out your life and career.

Write It All Down

After four or more years of attending school, it may be difficult to know every detail of multiple loans. In the case of your student loans, ignorance is not bliss. Take the time to understand what student loans you have and where they can be managed. You’ll want to make note of the following: who the loans are serviced by, what the balances are, monthly payments, the types of loans you have and the interest rates on each loan. With these details, you will be able to create an effective strategy to pay off your student loans.

Understand What Types of Loans You Have

There are many different types of student loans. Loans are either federal or private. Depending on the types of loans you have, there will be different benefits, payment, and refinancing options available to you.

Refinance & Consolidation

If you have several student loans with multiple payments to make each month, you may benefit from refinancing and/or consolidating your student loans. This process is different depending on what type of loan you have. For instance, federal loans can be consolidated through a federal program or refinanced through a private lender. A federal consolidation will combine your loans into one loan balance and monthly payment, but the new interest rate will just be a weighted average of the interest rates on your former loans. A student loan refinance can involve consolidating several loans, both federal and private into one payment, but it will also reflect a change in the interest rate.

What Impact It Will Have on Your Future

It’s important that you think about how student loans will affect your future plans. How much money will you need to make to afford your payments? Consider how you’d afford going to graduate school and how much interest would accrue on your loans if you put them into deferment while attending a graduate program. There are many repayment options that you can take part in to make your monthly payments more manageable, however, make sure you understand the cost benefit of these income-based programs as they can significantly extend your loan terms.

Student Loan Tips:

  1. Keep your lender up to date with all of your contact information. Be sure to read all correspondence that is sent to you either by mail or electronically.
  2. Don’t forget that the interest you pay on your student loans is tax deductible. At the beginning of every year, all student loan lenders are required to send out 1098-E to anyone who paid interest on their student loans in the prior tax year. Up to $2500 of interest can be deducted from your taxable income.
  3. Pay off the most expensive loans first. If you are unable to refinance your loans to a lower rate, keep them separate and attack the loan with the highest interest rate first if you have extra money to allocate each month.
  4. Understand your repayment options. This will vary between private and federal loans. If you are struggling to make the payments that were set up call your lender and see what options you have for lowering your payments.
  5. Make sure you understand your benefits. you may end up forfeiting some benefits by refinancing or consolidating your student loans.

If you are interested in getting a private student loan or refinancing your existing student debt, visit Credible.