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A Real Simple Guide to Paying Off Student Loans

By Edited Jan 1, 2016 2 5
student loans comic

Paying off student loans doesn't have to be hard, but young people are not exactly ingrained with the knowledge of how to pay off your student loans. This real simple guide for paying off your student loans will make the first big loan of your life the easiest to handle.

So you are out of college, you got a decent paying job and your life is going pretty good. Then approaches the dark cloud in your future. The big sixth month out of college is when the notorious student loan payment kicks in.

It's time to get ready to tackle that beast.

Know Who You Are Dealing With

If you are going to repay your student loans you should probably first know what sort of student loans you have to pay off.

Stafford Loan

Either the federal government or third-party lending institutions offer these loans. Stafford Loans are either subsidized or unsubsidized.

Subsidized loans are awesome. Subsidized loans don't earn interest until you leave school.

UnsubsidizedUnsubsidized loan earn interest from the moment you take out the money.


PLUS is an acronym for Parent Loans for Undergraduate Students. To qualify for PLUS Loans, parents must have children who are enrolled at least half-time at an approved educational institution.

The maximum allowable amount that can be borrowed for a PLUS Loan is the difference between the cost of the student’s attendance and any other financial aid the student receives (a number set by the school’s financial aid office).

Unlike Stafford Loans, PLUS Loans feature neither a grace period during which no payments are due nor any period during which interest doesn’t accrue.

Perkins Loan

Federal Perkins Loans are loans guaranteed by the U.S. Department of Education and are available for undergraduates and graduate students. Unlike Stafford Loans, however, federal Perkins Loans have a fixed rate of interest and are made by your college or other institution (the government gives the college the money, and the college distributes it).

Figure Out A Number

Now that you know who you owe money to, you need to figure out how much you owe. If your loans are strictly from the government, then the number is easy to calculate. All you need to do is go to the site where you took out the loans and they'll give you some exit counselling and spit out a number.

Most, if not all, federal loans are handles through studentloans.gov

If you have private loans, you need to go to their website. For example, go to the Sally Mae website and do their exit counselling and again spit out a number.

Add the numbers up and boom! That is how much you owe.

I bet it's a big scary number, yeah? The average student loan amount for the college student is $22,000.

Jobless? No Problem

There are quite a few loan deferment programs that you can enter to put off paying your student loans. Most programs even give you some money that you can put towards your loans. Some give you money for each year you serve, others give you a lump sum.

Miltiary Service

If you join the Army Reserve or the National Guard after graduation, you can receive up to $20,000 to pay off your loans.


Peace Corps is an American volunteer program run by the United States Government offering working for twenty-seven months period on work related to international development, such as education, business, information technology, agriculture, and the environment. If you travel with the Peace Corps, you will get to defer most of your student loans until after you leave the program, may get some of your loans reduced by as much as 70%.


AmeriCorps is a U.S. federal government program on civic education, education, and public service

Deferment and Forbearance

You can negotiate with your creditors to give you a period of time during which you do not have to pay, but will allow interest to continue to accrue, if your loan is unsubsidized. You can defer your loans automatically if you go back to graduate school.


Forbearance is similar to deferment, in that you get a grace period, forbearance allows you to negotiate with your creditor a three-month period during which you do not pay, provided you document a circumstance of hardship.

Tips to Pay

The best strategy is you have multiple loans from multiple people is loan consolidation. Loan consolidation combines these loans into one big loan. This big consolidated loan takes longer to pay off, with more interest to pay. There are many companies offering loan consolidations; you have to do your research and shop around for the best rate should you consider this option.

If you do not choose loan consolidation, you should always pay the loan with the biggest interest rate first.

Repayment Options:

Pay in full

If you have the money, you can choose to pay back all you owe at once, without owing any more interest. Usually, this option is not viable, or else you probably did not need to take out the loans in the first place.

Standard Payment

You make monthly payments to pay back your loans with interest within 10 years. This gives you the best interest rate, but requires the highest monthly payments.

Graduated Payment

This is a viable option if you get out of college expecting to make a modest but steadily increasing wage. The payment requirements will start off low, then increase every couple of years for the next 10 to 30 years.

Income-Based Payment

You may choose to make your monthly payment bill proportional to the amount you currently make and get up to 15 years to pay it off.

Long-Term Payment

You pay back your loans plus interest in 30 years with monthly payment.

Good Luck!

Now that you have figured out who you need to pay, how you want pay, and when you need to pay I reckon you are all ready to have at it. Best of luck to you and in 2-30 years you should have this massive loan taken down. Then you can create more debt with more loans, yay!



Nov 13, 2012 7:04am
Great article, with helpful tips.
I am considering going back to school soon and use your information on that topic.

Thumbs Up!
Nov 13, 2012 1:13pm
good info! best to try to pay off loans asap, before the interest kicks in too much, next thing you know, you've paid over 100k worth of interest alone on a loan that was only worth 50k... ''upside down'' on any loan is never good.
Nov 13, 2012 1:28pm
Good and accurate. Student loans, the bane of my existence!
Nov 13, 2012 11:36pm
Honestly I have to say I didn't see any tips in here. It read like a definition of terms from Sallie Mae's website. :( This is stuff every student should know after completing loan exit counseling prior to graduation.
Nov 19, 2013 9:26am
Unfortunately while every graduating student should know it, many do not.
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