Whether you’re a current college student or a recent graduate, it’s likely that you have student loans. Whatever your situation or career stage, it’s possible to develop a repayment plan that can help you pay these loans off faster and at lower cost.

Here are eight tips:

  1. Understand how interest rates work. The interest rate on your student loan will have a substantial effect on what your loan will cost you over time. Interest usually begins accruing as soon as your loan is disbursed. This means that a $10,000 student loan you received freshman year could be a lot higher post-graduation. The longer you take to repay your student loan, the more interest it accrues, and the more the overall cost of your loan will grow.
  2. Pay what you can as soon as you can. Based on the repayment plan you have chosen, you may not be required to make payments on your loan while you are in school or for six months after (during your “grace period”). However, if you have the means to make payments – even if they’re small – during school or before your repayment period begins, you’ll pay less over the life of your loan.
    Consider using any windfalls or monetary gifts to pay down your loan balance. Small, extra payments can reduce your overall loan and interest expense over time.
  3. Leverage your tax refund. You may be surprised to know that you may be eligible for a tax deduction based on your student loan interest payments.[1] If you apply all, or part of your refund to your loan repayment, you may see a meaningful reduction in your overall balance. To learn more, consult a tax advisor for any potential tax benefits.
  4. Pay off higher interest student loans first.  If you have more than one loan, identify the loans with the highest interest rates and work with your loan servicers to see if you can pay them off faster than loans with lower rates. In any case, you will have to make regular, agreed-upon payments on all your student loans.
  5. Sign up for automatic payments. Most federal student loan servicers offer a 0.25% discount if you authorize them to automatically take payments directly from your bank account. Many private lenders also offer an auto debit deduction, too. For example, PNC offers student loans with a 0.50% interest rate discount for automated payments.* As long as you maintain adequate funds in the account, this tactic helps ensure that payments are made on time, potentially strengthening your credit rating.
  6. Research loan forgiveness and special payment options available for federal loans.[2] Most borrowers combine federal loans with private loans when funding their education. Certain occupations, such as teachers, the military and AmeriCorps participants are sometimes eligible for federal loan forgiveness or favorable repayment options. Your income after graduation and family size may also qualify you for relief from your federal student loans.
  7. Start a dialogue with your loan servicers. Loan servicers can be helpful in exploring additional options when you need help – especially if you’re experiencing financial hardship.[3] You may be able to: 
    • Lower your monthly payments by revising your repayment plan
    • Refinance your loans
    • Apply for deferment or forbearance for temporary relief
  8. Stay informed of recent changes. Student loan repayment options are complex, and rules and regulations may change frequently. You can find comprehensive student-loan-related planning, lending, and budgeting information here.