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Stress-Free Student Loans
July 11, 2017

Stress-Free Student Loans: The Most Effective Way to Handle Repayment


Any recent college graduate understands the stress of looming student loan payments. Only six short months after leaving campus, the first payment is due. Too many graduates that can be overwhelming and stressful. Although no one can escape making the payments, proper planning and navigation of the student loan system can significantly decrease stress levels.

The first step to stress-free repayment is to get organized. The borrower should know how many loans they have and who the student loan servicer on each loan is. A great way to find that information is through the National Student Loan Database for federal loans and the borrower’s credit score/college financial aid office for private loans. Once you know how many loans and who the servicer is, ensure that the student loan servicers have your correct contact information (address, cell phone number, email). The borrower is responsible for ensuring that the lender has the right contact information. If statements go to an old address, it could cost the borrower in late fees and added interest.

During the borrower’s six-month grace period, they should choose a repayment plan. Preferably, the borrower should pay the maximum monthly.  Although a low monthly payment may be enticing, it will really cost the borrower in interest over the long run. If the borrower does not have a subsidized government loan, interest may accrue during the grace period. If possible, the borrower should make payments during the grace period to combat the accruing interest. If the borrower has found a high-paying job and has built an excellent credit score, the borrower should refinance the student loan as it could lead to huge savings.

Before the first payment becomes due, the borrower should set up automatic payments from their bank account. With automatic payments, the borrower will be less likely to be late on a payment and some lenders will discount the interest rate by .25% or more. If the borrower believes that the automatic payments could overdraw from their account, they should refrain from setting up the automatic payments to avoid over-draft fees.

Life does not always go according to plan and it is common for borrowers to have difficulty finding work right out of school. If a borrower is in this situation, they can request a deferment from the servicer until they are in a position to make payments. If the borrower is employed at a low-paying job, and payments are overbearing, under a federal loan the monthly payments can be decreased to a percentage of your monthly income. Usually, federal loans offer more consumer protections and more flexible repayment options. However, if you are struggling to make payments on a private loan, call the servicer and see what kind of relief they offer. Many private servicers offer loan modifications for struggling borrowers.  

If you are a new college graduate or struggling under the weight of student loans, it is important that you discuss your student loan situation with a professional so you can understand the financial implications of repayment options. Although no one enjoys repaying student loans, proper planning can make the process much easier.

If you have any questions about the above material or wish to speak to an attorney, please contact HoganWillig at (716)636-7600. HoganWillig is located at 2410 North Forest Road in Amherst, New York 14068, with additional offices in Buffalo, Lancaster, Lockport, and Ellicottville.

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