If you have a federal student loan, here’s what you need to know about your repayment:

Don’t worry about paying back loans while you’re still in school.

The first year after leaving college (or any program), you won’t have to pay back anything. If you want to start repaying your student loans right away, you’ll need to make monthly payments until you’ve paid off at least some of your debt. But don’t panic; once you graduate and get a full-time job, you’ll no longer be responsible for making those payments. That’s good news if you were worried about having to cover tuition costs while you work.

You can defer your loan payments.

Once you get out of school, you can ask your lender to let you delay payment by several years. In exchange, you will have lower interest rates and fewer penalties. There are two types of deferred payments: forbearance and income-based repayment. Both options allow you to put off payments until later without actually eliminating them entirely. However, they aren’t always the best choice.

Forbearance This option lets you avoid making payments on your loans for up to nine months—possibly even longer. While you may find yourself paying less in interest over time, you’ll still owe money on your loan when you eventually resume regular payments. Also, you run the risk of having your entire balance forgiven after 10 years.

Income-Based Repayment Under IBR, your monthly payment amount is based on your adjusted gross income and family size. Payments are due regardless of how much you earn, and you can pay as little as possible each month. When you enter repayment, you’ll only make minimum payments, but after 25 years, your remaining balance will be canceled. And unlike forbearance, there’s no way to get rid of the debt completely. However, as long as your payments remain consistent, you should end up saving money compared to standard repayment.

Your lender might offer you a grace period.

Your lender may give you extra time to repay your loan, which means you could skip a few payments without being penalized. This can happen automatically if you miss a single payment, but if you fall behind on multiple payments, your lender may require you to wait before offering you another extension.

Interest accrues on your account.

That’s important to keep in mind. Every day you go without making payments, your total unpaid principal grows. Over time, the accumulated interest can add up fast.

You can consolidate your loans.

It might sound counterintuitive, but consolidating your loans can save you money. By combining your debts into a single monthly payment, you pay less interest than you would on separate accounts. Plus, you can rest assured knowing that you’ll never default on your consolidated loan. Instead, you’ll just continue making payments according to the terms of your agreement.

You may qualify for a consolidation loan.

You’ve probably heard lots of stories about people who took out big piles of student loans and then couldn’t afford to make their monthly payments. To help these borrowers, Congress passed the William D. Ford Direct Loan Consolidation Program in 2008. Now, anyone who owes $50,000 or less on subsidized Stafford Loans, PLUS Loans, Perkins Loans, or direct federal work study loans can apply to take advantage of the program.

If you have a federal student loan, here’s what you need to know about your repayment:

With interest rates at historic lows and no end in sight, student loans seem to be inescapable. But while they may feel like a constant financial burden, these loans aren’t nearly as bad as many borrowers think. In fact, there are plenty of reasons to pay them off early—even if you’re not making much money right now.

Here’s how paying back your debt could actually help you financially.

Early Payoff of Student Loans

One way to save money on student loans is to pay them off sooner rather than later. That means graduating college with less debt, saving money on interest rate payments, and avoiding a spike in monthly payments after graduation. If you take out loans when interest rates are low (as they were between 2008 and 2014), you’ll have to pay those loans over a longer period of time. A recent report from the Federal Reserve Bank of New York found that by waiting until after 2017 to pay off a $20,000 student loan, someone would have paid $24,000 in extra interest payments. There’s no doubt that having to pay that much more in interest would make the decision to delay paying off the loan harder still.

Keep Track Of Your Payments

When it comes to tracking your payments, there’s no excuse not to keep track of them. Students often don’t realize just how much their interest rates could change based on when they take out loans and start repaying them. Letting go of the numbers and relying on vague memory alone is never a good idea. Instead, use online banking tools to monitor your loan balances and payment amounts. If you’re using an online platform, you should look for the option to view your balance and what your payment amount is each month. You might want to consider taking the responsibility further by setting up automatic withdrawals from your checking account to cover your monthly repayment amounts.

Paying Upfront Can Save Money Later.

Another benefit of paying off student loans early is that you avoid having to deal with a spike in monthly payments once you graduate and enter the workforce. While your salary may increase dramatically, your loan obligations won’t necessarily follow suit. Most people entering the job market in 2018 are expected to earn around $28,400 per year—but according to statistics from the U.S. Department of Education, the average annual tuition cost for attending public universities was $21,250 in 2016. Paying off your loans before you start working full-time means you won’t have to worry about any added costs associated with student loan payments for years.

Use Student Loan Consolidation to Lower Monthly Payments

Many student lenders offer refinancing options to reduce the amount of debt you owe. If you consolidate your loans into a single loan, your annual percentage rate goes down. The table below shows the average APR for undergraduate students who took out loans through the federal government’s Direct Plus program. Here’s how the interest rates compare depending on whether you consolidated your loans versus having separate ones.

Consolidated interest rates are average annual percentage rates from April 1, 2015 to April 1, 2017.

Federal Stafford Loans—1.8% Subsidy4.66% Federal Stafford Loans—Unsubsidized 2.6% 5.61% Federal Perkins Loans—Subsidized at 0.9% 3.17% Federal Perkins Loans-Unsubsidized As of April 1, 2015, the rate was 2.0% 6.62%.

Federal Financing Institution is the source.

You may be able to reduce your payments even further.

If you have a federal student loan, here’s what you need to know about your repayment:

If you have a federal student loan, here’s what you need to know about your repayment:

You may not realize it, but if you have a federal student loan, you’re eligible for a repayment plan! 2. There Are Repayment Plans Available!– There are three different plans to choose from, including Income Based Repayment (IBR), Graduated Repayment Plan (GRAD), and Standard Repayment Plan (SRP). IBR requires 10 monthly payments of $0.00 per month plus 2% interest as long as the remaining balance is less than $0.25. GRAD requires 36 monthly payments of $10.55 per month plus 1.5% interest as long as the balance remains less than $30,000. SRP requires 25 monthly payments of $16.35 per month plus 1.85% interest as long as the remaining balance is no greater than $5,500.

Different Types of Loans Can Be Repaid at Different Times: As opposed to private student loans, which must be paid back over 20 years, FSLAs can be repaid over 15 years, 10 years, or even 5 years. Additionally, there’s no cap on how much money you can borrow. However, payments do increase as time goes on, meaning it could take longer to pay off.

Repayment Starts Immediately After Discharge: Payments on your student loans don’t start until after you graduate from school. Once you graduate, payments begin immediately.

There’s No Penalty for Late Payment or Failure to Make Payments- While the original principal amount still needs to be paid back, the interest is halted while you’re making these payments. So, if you miss a payment while paying down your loan, you won’t lose any extra money in interest, but you will accumulate additional debt.

Repayments May Continue Long after Your School Career Is Finished: In order to keep their credit rating high, lenders continue making payments on your student loans even after you’ve graduated from college.

If You’re Losing Money Because of Your Loan, Contact Us—We can help you figure out whether it makes sense to pursue bankruptcy instead of repaying your loans.

Repayment Options Aren’t Set in Stone- If you decide to switch your repayment options to a lower interest rate, you’ll likely incur some fees. These fees can range anywhere from 0% to 20%.

Don’t Forget to File for Tax Refunds: If you’re eligible, you can get tax refunds back on payments you’ve made towards your private student loans.

Paying Off Your Federal Student Loans Early Could Save You Money. If you want to make sure you’re saving more each month, consider paying off your loans before they become due.

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