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According to research studies, at least two thirds of American students are saddled with the student loan debt as they leave college. While some students graduate with over $20,000 in debts, there are others who are saddled with six figure debts. It is highly important for students to know how exactly to handle these loans.

Planning

It is in your interest to be equipped with knowledge of the loan terms, whether the loans are subsidized or not and how long the grace period is. Before taking the loan, ensure you do a comprehensive research to ensure you are opting for right loan that will make your process of repayment easier. When you are in the senior year, organize your repayment process as you will by now have an idea of how much you owe.

It is recommended to go in for Federal Student Loans as they are offered at better terms than private loans. As an undergraduate, you can choose from three types of Federal Student Loans namely the Federal Stafford loan, Federal Perkins loan and Federal Parent Plus loan. Private loans are unsubsidized and are offered at higher interest rates with more complex repayment plans.

Prioritize debts

Senior year is the time when you must take stock of the amount of loan you need to repay. Make sure you include all costs incurred during college as well as your credit card debt. Depending on loans with higher interest rates, prioritize your debts. High interest rate loans such as credit card and private loans have to be eliminated first. Concentrate on them even as you continue paying the minimum amount towards the low interest rate loans. 

Consolidate

The moment you graduate, you will be surprised at the number of lenders offering to consolidate your federal student loans. Consolidation is all about bringing various loans under one umbrella to make it easy for repayment. You can also enrol in the electronic service of the Federal Student Loan Servicing website if you want to make payments online. Here you can also change your billing options and view your payment history.

Work out a convenient repayment plan

You can contact lenders after you get a job and let them know your income and request for reworking repayment plan according to the income you earn. You can also opt for extended plan of repayment which will reduce the monthly repayment amount. If you get a better job, you can always change plans.

Do not avoid paying back loans

Defaulting on student loans can brand you with a bad credit report right at the beginning of your life. You may also have trouble with your job as a lot of employers look at your credit rating before offering you the job. Alternately, if you are finding it difficult repaying your loans, the best thing would be to talk to your lenders and working out a via media solution.

Last but not the least; ensure you hang on with determination. Remember, good times are not far away. Also remember that most of your peers are facing the same challenge. If planned in the right manner, you can pay off your debts, have a decent social life and still save for your retirement.