Understanding how student loan repayment works is essential to building a solid financial foundation as you begin your career. The federal government offers several repayment options, and it’s important to choose the one that best fits your financial situation based on the repayment terms and monthly payment.
This section focuses on focuses on the steps to gather the necessary information so you can determine which repayment option is best for you.
Step 1 - Make a list of all of your outstanding student loans
Federal Student Loans
Federal student loans are the primary type of loan students borrow – if you have taken out student loans, they are most likely federal loans. You can view a complete list of all the federal loans you borrowed during undergraduate, graduate and law school by logging into your account at Federal Student Aid’s website, studentaid.gov. Your federal student aid account also allows you to review your loan balances, loan interest rates, and the name and contact information for your loan servicer(s).
Private Student Loans
Private student loans, including bar loans, are credit-based student loans that are offered through banks and other lenders. If you borrowed a private loan, it will not be listed on the Federal Student Aid site. Instead, you will need to go directly to the private loan lender’s website to access your loan information.
Step 2 - Find out when loans will go into repayment
Federal Student Loans
Federal student loans are automatically placed into deferment while you are enrolled at least half-time. After you graduate, withdraw, or fall below half-time enrollment, your loans receive an additional six-month grace period or deferment before repayment begins.
Private Student Loans
Most private student loans can be deferred while you are enrolled at least half-time and may include a 6-to-9-month grace period. However, some lenders may require monthly payments to start immediately after disbursement. Repayment terms are typically linked to the interest rate, and lenders usually require you to select your repayment plan in advance. You should consult your lender directly for specific details regarding their repayment terms.
Loans borrowed prior to law school
Student loans borrowed prior to attending law school may enter repayment as early as 30 days after graduation if more than six months elapsed between leaving your undergraduate or graduate program and starting law school. Likewise, if you took a leave of absence from law school that lasted more than six months, the loans you borrowed prior to the leave may enter repayment 30 days after graduation, while the loans borrowed after the leave will retain their grace period and deferment options. If any loans enter repayment early, consider requesting a deferment or forbearance.
Step 3 - Create a budget
Once you know your income, review your living expenses—such as rent or mortgage, utilities, and other spending—to determine how much you can afford to pay toward your loans each month. You may need to adjust your lifestyle or spending habits to make room for these payments.
Step 4 - Prioritize your debt
Your goal should be to minimize interest by prioritizing higher-rate debts. Typically, this means paying credit cards first, followed by private student loans, which have less flexible repayment options. Federal student loan payments would be last as they have the most flexibility and can be extended over longer periods of time.
What's next?
Now that you have created a budget and identified the essential details of your student loans, you should have a good idea of what you can afford to pay. On our Loan Repayment Options page, we’ll take a look at the many repayment options available to you so you can identify the method of repayment that best fits your budget.