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How to repay your student loans

Now that school is over, you'll need to prioritize you living expenses, debts and more. Here's how to navigate the financial road ahead.

By MSN Money Partner May 22, 2013 12:42PM
This post comes from Gerri Detweiler of logoRemember that first week of college or university, when you wondered how you’d ever make it through? If you’re like most students, simply trying to map out your course schedule probably felt overwhelming. There there were forms to fill out, books to buy, and lots (and we mean lots) of coursework.

Mortarboard , diploma and money © Comstock, Getty ImagesHopefully, you had a good adviser to help give you through the process.

Similarly, if you are out of school, trying to navigate your options for paying back your student loans may seem just as daunting. You probably have several loans with different repayment terms. Some may be federal loans and others may be private loans. How do you prioritize them, along with all the other financial demands -- housing, food, transportation, etc. -- you are facing?

When it comes to your student loan debt, think of your credit reports and scores as your advisers. They are there to provide some necessary context for your emerging financial life. As you begin to pay back your student loans, refinance them, defer them or opt for forbearance, you’ll need to understand the impact of your choices over time.

So the first thing you should do, then, even before starting to pay off your student loans, is begin to monitor your credit reports and credit scores. There are a few ways you can do this. First, each year you can get a free copy of each of your three credit reports from In addition, provides users with a free credit tool that breaks down the information in your credit report using letter grades, and provides you with free credit scores.

The information you find can help guide you in three ways:

1. See the big picture. In school, you couldn’t just pick any class that sounded interesting. Unless you wanted to stay in school forever, you also had to make sure you fulfilled your requirements for your major and for graduation.

When it comes to your student loans, you can’t just look at each loan individually; you also must get a handle on your total student loan debt, which is likely made up of multiple loans. Your credit report will likely list all of these loans, so you can see how much you owe in total. You can also check the National Student Loan Data System to make sure you haven’t missed any of your federal loans.


But that’s just the start. You likely have other debts, and those are important to include in your debt repayment plan as well.

You should find most, if not all, of your debts -- including your car payment, credit card balances, and your mortgage if you have one -- listed on your credit reports. This will give you a much more complete picture of your overall debt situation.

If you discover your debt is more than you can manage, you may want to talk with a credit counseling agency or find out if you are eligible for the Income Based Repayment program.

2. Prioritize your payments. You may want nothing more than to pay off your student loans quickly. But in some cases it makes sense to pay off other debts more aggressively first. This is where your credit scores come in handy. Along with your scores, you should get information about which factors are most influencing your scorse.

For example, let’s say you get your free Credit Report Card from and you see that you’re not getting a good grade for the category that includes the debt you are carrying. (Your debt makes up nearly one third of your credit scores.)

Now let’s say you have a credit card with a small limit; say $500, and your balance is $400. It’s likely that relatively small balance is having a much greater impact on your scores than your much larger student loan balances.

Why? Because you are close to the limit on that card and the high balance is affecting your “utilization.” (Student loans are installment loans, not revolving accounts, and that factor is not a concern there.) Pay it down as fast as you can and you may see your score go up. But if you put that same amount of money toward your student loan, your score may not budge.

You didn't learn that in school, did you?

3. Monitor your credit. If you pay them on time, your student loans should help your credit scores, even if the amounts are relatively large. But if you miss a payment on one of these loans -- or any other -- your credit scores will suffer. Even one late payment can drop your credit scores by 50 points or more. And if you’re taking on more debt, you’ll probably see that reflected in lower scores.

By reviewing your free credit score each month, you’ll see whether your credit is improving. If it is, keep doing what you’re doing, and if it’s not, you know you’ve got your work cut out for you!

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May 22, 2013 3:07PM
This article was a load... It asumes the job market will remain the same for you your entire working life... HAH!  Graduated in 1992, and after several lay offs.... changes... corprate political plays, I am still paying for student loans and have $8K left on my wife's!!  Luckily a severance check after another lay off was enough to pay my balance of $5K off in 2011. All these writers live in a dream world... Life is a road of unpredicatability....
May 22, 2013 3:26PM
It is ridiculous what college costs now.  When I was going to school a semester cost $335 dollars.  Now it is 8-10 thousand, depending on where you go.  How are the kids ever going to buy a house and afford to retire? 
May 22, 2013 2:46PM
Just sit tight.  Obama will forgive your student loans.
May 22, 2013 3:28PM
They are still selling the this buch of bull on education to kids that will not be used and they will pay for this.
May 22, 2013 4:09PM

Better advice: follow Dave Ramsey and you can't go wrong. 

May 22, 2013 7:18PM
This article doesn't cover older people who, because of job loss had to return to school late in life to even qualify for any job. And then no one will hire them because of their age!
May 22, 2013 3:55PM
Phuck it. I say we all walk on those #$%^&* student loans. Credit sucks anyway; whadda they gonna do, repossess my education?
May 22, 2013 6:27PM
Make them come after you and keep telling them to go to Hell or take you to court; if you don't have any money they can't hurt you and being without a job a about par in America.  All jobs go to the foreigners
May 22, 2013 6:00PM
It isn't about education it's about the gov the banks and the schools
making sure kids these days are loaded with life long debt.
Their only intent is to train an army of docile bill payers and tax payers.
I truly feel sorry for this next generation of wage slaves.

May 29, 2013 10:15PM
I have $90,000 in student loans with no other debt and a $15,000 a year job.  Somehow I don't think this advice is going to work for me.
May 25, 2013 11:28AM
What a Load... First you need to get a REAL JOB... Good luck on that...
May 24, 2013 4:42PM
Federal student loans charge over 6% interest.  But the policies of the Fed are keeping interest rates so low, that you're lucky to earn even 1% on savings.  The government/banks are making a very big profit, and the customers are getting the shaft.
May 23, 2013 2:24PM
The government should build more state funded schools rather than give artificially cheap loans. That would have the bigger affect on the cost of tuition.
May 22, 2013 4:53PM
Student loans should not be forgiven, bottom line. HOWEVER, interest rates on loans are one of the reasons that repayment is so difficult, so in order to help out graduates then something could be done to lower interest rates. However you look at it though, a loan is a loan, and should be re-payed. If loans ever are to be forgiven, then the degree should be VOIDED right along with it. Sure you may have graduated, but unless those loans are re-payed, then you are not justified to list yourself as a college grad on a resume. That way the individual can decide what is more important to them--paying their loan, or having to apply for jobs as a non-graduate.
May 22, 2013 6:56PM

More high school graduates need to take advantage of online universities.  You won't get the whole college lifestyle thing, but you can graduate quicker at a fraction of the cost.


Many employers aren't impressed at where you went as much as what you have for your degree.  A degree in engineering is just as good if it says National American University versus UCLA.  And it costs you over 100,000 less.

May 22, 2013 5:25PM
If you have a student loan get a job and pay for one forced you to take out the loan!!
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