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Recent Grads – Here Are 6 Things to Do (As Soon As You Graduate) To Start Paying Back Your Student Debt


Congrats, you’ve graduated from college! Maybe you’ve thrown your cap in the air, celebrated how amazing you are and you’ve started thinking about what the heck to do with your life. Wooo! Now all you have to do is start your post-grad life…oh, and pay off your student loans. 

Graduating college is full of tons of stressful unknowns (including getting a job with no experience), not to mention, having a huge sum of money you have to pay off without even being in a place where you earn money yet. Ugh! Recent graduates actually have more student loan debt than ever before, with national student loan debt toppling over 1.3 trillion dollars. 

If you are tasked with paying off your student loan debt, you are not alone. Seriously. So many recent grads are faced with this reality. 

In this post, we’re going to dive into 6 things to do (as soon as you graduate) to start paying back your student loan debt. You might be thinking, what’s the rush to pay back my student loans? Well, most student loans have interest attached to them. Meaning, the longer you wait to pay – the more interest you accrue. You also (most likely) are already on some sort of payment schedule. 

Let’s dive in!

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6 Things to Do (As Soon As You Graduate) To Start Paying Back Your Student Debt

Understand Your Debt

If you don’t already fully understand the terms and rates around your student loans, do some research. Take the time to understand things, such as: how soon you’ll have to start making payments, what your interest rate is like and more. If you need more information, here is a great site from Lexington Law that talks more about student loans. 

Fully understanding the details around your debt will help you with #2, creating a plan around paying off your debt. From all the reading I did even for writing this post, I noticed that different student loans had different rules around them – so I can’t stress enough, take the time to understand the details of yours! 


Create a Plan  

After you’ve fully understood the terms of your debt, start coming up with a plan to pay your student loans back. You’ve just graduated, so this is the perfect place to start. 

Make sure you understand these questions on the student loan side: how soon do you need to start paying your student loans back? What does your minimum payment look like now? Check what your interest rate is! What does the penalty like if you don’t pay back? How much interest have you already accrued? 

On your side, answer these questions: how much money are you bringing in every month? What do your expenses look like? 

In my experience, when I have something big and long term to pay off, coming up with a specific plan helps me feel less stressed. I love feeling in control and this plan will help you do exactly that. 


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Make a Budget 

Now that you fully understand the money coming in and coming out of your bank account every month, it’s time to make a budget.

Here’s the way I like to do expenses: 

  • Write down how much money do I have coming in every month 
  • Them, write down your expenses you have every month (ie rent, bills, gym membership) 
  • See how much money you have left over – do an approximate calculation of your minimum spending 
  • Look at the difference – do you have enough to pay off your minimum payment for your student loans? 
    • If yes! Great. Can you pay off more every month? How can you still live or your life while paying the most possible? 
    • If not, look at your expenses – what can you cut back on to make your minimum payment? =

There you go – a super easy, simple budget. If you have student loans, I can’t stress this enough – make sure you are making your minimum payments. It is SO important! 


Make Extra Payments Or Early Payments 

In an ideal world, we would get rid of your student loans as soon as possible. It’s so hard to leave college knowing you already have a sum of money you need to pay back. If you are in a great place to start paying more money back early or extra on your minimum payment, do it. 

Make sure you apply the extra payment to the principal amount, not the interest. Many loan companies will automatically apply an extra amount to the interest first – but make sure you put it towards the principal loan balance. You can always contact your lender as well to make sure you are making progress towards your overall balance. This will save you money long term. 


Some private loan companies will give you a penalty for making an early payment – so make sure you check with them before making any moves here! 

Understand How Your Credit Score Plays Into Student Loans Credit Score 

Your credit score is a numerical score that defines how likely you are to repay debt. So if you need to take out a loan to buy a house or a car (or literally anything in San Francisco, lol), a bank will check your credit score to see the risk in getting a loan. It basically is a three-digit number that defines your financial reputation. Your credit score will range from 300 – 850 and is based on your history with credit. 

Now if you end up missing student loan payments, it can definitely have an effect on your credit score. Make sure you understand this fully as you make your budget.


Enjoy Your Life

I never want loans or money to control anyone’s life – that’s not making the most of your twenties. Follow the steps listed in this post to be in control of your student loans start paying them off as soon as you’ve graduated. 


College students! I can’t wait for you to get to be the boss of your financial life by taking control of your credit score! If you need help with your credit score, you can always reach out to Lexington Law.



Letter to College Students: This Is Why Credit Score is Important

Six Tips On Living Affordably – The Tricks I Actually Use To Save Money In San Francisco

5 Things You Need To Know About Your Credit Score In Your 20s 


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