5 Steps to Take With Your Student Loans When You Graduate

Student loan computer keyboard
Photo: Peter Dazeley / Getty Images

When you graduate from college, you may be more focused on finding a job and getting your first place than your student loans. While the student loan counseling required for graduation may briefly explain your responsibilities, it is important that you take action with your student loans as soon as possible.

Update Your Contact Information

It is important to update your contact information for your student loans when you graduate and every time you move. You will still be responsible for making payments on your student loans whether or not you receive the statements via mail. You may also consider switching to paperless invoices, which will be sent to you via your student loan portal.

Updating your information and using a permanent address (such as your parents’ address) as a backup will help you receive the information in a timely manner and determine the best way to manage your student loan payments.

Verify Your Deferment

Although your student loans are supposed to automatically enter a grace period or go on deferment when you graduate, sometimes there is a mistake and the loans do not. You may end up with late charges and interest payments if you do not verify that the student loans are on deferment.

A simple phone call to your loan company will allow you to verify this and save you the hassle of straightening out a mess after it happens, and avoid any potential damage to your credit.

Consolidating Loans

You may have the option to consolidate your subsidized and unsubsidized loans into one payment once you graduate. Making one payment instead of several is usually much easier than paying several payments a month.

However, be cautious if you want to consolidate federal student loans with your private student loans. This will cause you to lose the benefits that come with federal loans like the Income-Based Repayment option or a hardship deferment if you lose your job. Private student loans often do not offer the same payment terms.

You may want to consolidate any private student loans you have and try to refinance to a lower interest rate that you can lock-in. It may be difficult to do this until you have your first job, but it is something you should consider.

Private student loans usually have a higher interest rate than federal loans. Depending on the type of private student loan, you may not be able to claim the interest as a tax deduction.

Payment Help or Forgiveness

It is worth looking at the different payment options available based on income and job choice. If you have a federal student loan, an Income-Based Repayment option will base your monthly payment on your income. To qualify for this repayment option, you'll need to apply with your student loan servicer and provide information such as your income and family size.

Another option is to consider student loan forgiveness options available for federal student loans. If you work for the government or a nonprofit for 10 years and have a Federal Direct Loan, you could have the remaining balance of your loan forgiven if you have paid on time for the entirety of those 10 years. Teachers qualify for a similar program, but the term is generally five years.


Student loan debt forgiven between 2021 and 2025 is tax-free, due to the American Rescue Plan of 2021.

Some states may offer different loan forgiveness options, and some jobs may offer incentives and money to put toward your student loan as a signing bonus or after you have worked there for a set period. Taking the time to look for these options can help you save money and determine the best way to deal with your student loans now and in the future.

Make a Plan to Pay Them Off

Student loan debt can be crippling, especially when you are struggling to make ends meet with your first job. It is important to set up a plan that will allow you to pay off your student loans as quickly as possible.

An important part of this is setting up a budget that leaves room for extra payments on your debt. Consider starting with your private student loans and any consumer or credit card debt you have from college, and then move on to your federal student loans. This is because the interest rate is usually lower on federal student loans and you can claim a portion of the interest on your taxes. You may need to be creative in finding extra money to pay on your student loans like taking on a second job or freelancing.

Updated by Rachel Morgan Cautero.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Federal Student Aid Office of the U.S. Department of Education. "Complete Student Loan Exit Counseling."

  2. Federal Student Aid Office of the U.S. Department of Education. "Student Loan Repayment."

  3. Federal Student Aid Office of the U.S.Department of Education. "Student Loan Consolidation."

  4. Internal Revenue Service. "Publication 970 (2020), Tax Benefits for Education - Qualified Student Loan."

  5. Federal Student Aid Office of the U.S. Department of Education. "I Need to Lower or Suspend My Student Loan Payments."

  6. Federal Student Aid Office of the U.S. Department of Education. "Public Service Loan Forgiveness (PSLF)."

  7. Federal Student Aid Office of the U.S. Department of Education. "Teacher Loan Forgiveness."

  8. U.S. Congress. "H.R. 1319," Pages 182-183.

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