College is a time for young people to develop a sense of independence, explore interests and begin pursuing their dream careers. But today, many college students spend much of this formative time worried about their finances, wondering if the student loans they took out to offset rising tuition costs will leave them deep in debt once they graduate.  This concern is not unfounded; on average, graduates of the class of 2016 racked up a record-level $37,000 in student loan debt. This level of debt can leave many struggling to pay off their student loans years after they graduate.

As you begin planning how you might manage your own student loan debt, consider these useful tips:

  • Get Organized: People most commonly miss their first payment because they are unaware of the terms of their loans. Understanding how much you owe, the terms of your loans and the grace period associated with them is extremely important. This information will help you fully understand your circumstances and allow you to make informed decisions about how to develop a budget and repayment plan. To get information on your government student loans, go to To get information on your private student loans, contact your loan servicer.
  • Consolidate Your Loans: Many students graduate with loans from multiple sources. Consolidating your student loans may decrease the amount you pay each month and may allow you to gradually pay off your debt. However, you should keep in mind that this will also likely leave you with more interest to pay on your loan.
  • Set Up Automatic Payments: Automatic payment plans save time, stress and, in some cases, money. Some lenders will decrease the interest rate on your loan (usually less than 1 percent) as an incentive to set up automatic debit payments. Even a small reduction can save you money in the long run.
  • Pay Down the Principal: Paying off more than you owe during months when you can afford it will help reduce your interest rate. If you are able to, consider making higher payments right after graduation, during your grace period, to significantly lower the amount of interest you will pay over the course of the loan.

As always, a CERTIFIED FINANCIAL PLANNER™ professional can help you develop a repayment plan tailored to your financial situation. He or she will be able to help you consider your different payment options and their associated costs.