You're a new grad, maybe in a new city with a new job, apartment and friends. But not all the new things about postgrad life are fun and sparkly; you likely have a new debt to deal with, too.
If you graduated in May, your first student loan payment will probably come due next month. And if you're like a lot of recent graduates, you're craving some structure amid all the newness. Follow this three-step plan to help you start chipping away at your student debt.
Step 1: Become an expert on your own loans
Start with the basics. You should be able to answer the following questions about your student loans to best know how to tackle them:
- Who is your federal loan servicer?
- How much do you owe total and what are your interest rates?
- How much do you owe each month and when is your first payment due?
Find this information about your federal loans by logging into your
or checking with your loan servicer. If you have private loans, contact your lender.
Step 2: Budget for your monthly payments
A depressing reality of postgrad life is that you'll need to make room in your budget for your student loan payments. Plan to pay the minimum amount due every month to keep your credit in good shape. Another tip: Set up autopay. In most cases, you'll get a 0.25% interest rate discount for automating your payments.
It's also a good time to figure out how your student loan payments will fit into your overall financial picture. Based on the 50/30/20 budgeting strategy, you should spend about 50% of your take-home earnings on needs, including your minimum student loan payments, rent and other necessary bills.
Step 3: Income too low? Adjust your payment plan
If your student loan payments eat up too much of your paycheck, switching to an
may be what you need. The plans base your minimum federal loan payment on your earnings and can
lower your payments; depending on your income, you may not be required to pay anything
. It sounds like a no-brainer, but keep in mind that they also increase the amount of interest you'll pay in the long run.
If an income-driven plan makes sense for you, it's free to sign up through the Department of Education. Apply on the Federal Student Aid website to get started.
Next steps
Once you get into the groove of making your monthly payments, check out ways to save money on your student loans:
- Refinance your student loans to save money in interest. You'll likely qualify if you have good credit and a high income compared to your other financial obligations.
- Get federal loan forgiveness based on your employer or occupation. For instance, you're eligible for Public Service Loan Forgiveness if you work for the government or a nonprofit.
This article originally appeared on NerdWallet.
Teddy Nykiel is a staff writer at NerdWallet, a personal finance website. Email: teddy@nerdwallet.com. Twitter: @teddynykiel.
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Already contributed? Log in to hide these messages.
