Student Loan Payments: What You’ll Need to Know

 August 27, 2020
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When you take out student loans, chances are, you’re not planning on paying them back until after college.

But what do you do when the bills come due? If you aren’t prepared, you may find yourself asking “How do I pay my student loans?” But don’t feel too overwhelmed — there are many ways to handle student loan payments, including extending your grace period, making extra monthly payments (if you can afford it) and learning when it’s time to consolidate or refinance your loans.

As you get ready to begin repaying your student loans, here’s what you need to know about…

Making your first student loan payment: a checklist

Let’s go through a list of actions to take as you start repayment. Note that you wouldn’t do all of these things — some are mutually exclusive — but you’ll be well prepared if you’re at least aware of the following:

Find when your grace period ends

The good news is that, in many cases, you have a brief period of time before you have to start repaying your student debt. Known as a grace period, it gives you time to figure out your finances and set up a student loan payment plan that works for you.

The length of your grace period depends on the type of loan you have and your servicer. In general, federal student loans come with a six-month grace period, which starts from when you graduate, leave school or drop below half-time enrollment. Realize that interest accrues on unsubsidized loans during your grace period (though not on subsidized loans), as it does while you’re in school.

There are exceptions to the federal loan grace period. For example, PLUS loans enter repayment as soon as they are disbursed, so as a result, you may need to defer your payments if you aren’t prepared to begin.

However, if you’re a graduate or professional student, you will be enrolled (automatically) into a six-month deferment from your PLUS loans after graduation, or if you drop below half-time enrollment or leave school. Your loan servicer can provide you with information on deferring your PLUS loan payments.

Another exception is the Federal Perkins Loan. Even though that program is discontinued for the time being, you might still have a loan from earlier semesters. The school where you received the loan, or your current servicer, can help you determine your grace period.

Finally, if you have private loans, you’ll need to check with your servicer to find out if there’s a grace period for those. Some private lenders, like Citizens Bank, offer a six-month grace period if you defer your payments on the loans until after graduation, while others expect you to begin paying as soon as you finish school. Further, some lenders may require repayment while you attend school, so you might need to ask for a deferment if you want to wait until graduation.

Changing your grace period
There are situations that can impact the length of your federal student loan grace period. Below are three circumstances that can result in changes for government student debt. (For private student loans, the policy will vary, so check with your lender.)

  • Student loan consolidation. When you consolidate during your grace period, you give up the remainder of the time you have. In general, the first payment on your consolidated loans takes place about two months after the process is completed.
  • Active duty military. If you’re serving the country as a member of the military and you’re called to active duty for more than 30 days before your grace period ends, a full six-month grace period will start upon your return.
  • Returning to school. If you re-enroll in school (including grad school) for at least half-time before the end of your grace period, you will have a full six months’ grace period once you leave school or your enrollment drops below half-time.

Find your student loan servicer

You can’t make a payment if you don’t know where to send the money. The federal government uses other institutions, called servicers, to manage your loan payments. In most cases, your loan servicer should contact you directly, letting you know when your first payment is due and how much you owe.

However, if you’ve applied for federal aid, your first stop online should be the U.S. Department of Education’s Federal Student Aid portal — there you can log in and learn how to pay for your loans. Make sure to sign up for a Federal Student AID ID and use it to look up your student loan information.

That said, note that a change to the line-up of student loan servicers is in the works, so your servicer may change in the near future. (Read this post for the latest information.)

Do you already know the name of your servicer, but aren’t sure how to contact them? Use this list below, provided by the Department of Education to find the contact information for your federal loan servicer.

Federal Student Aid

For private student loans, you’ll need to check through your mail or email correspondence to see who is servicing your loans (if it’s not the lender itself). If you’re unsure of what private loans you’ve borrowed, you can look them up via your free credit report.

Try to keep information on your loan servicer in an easy-to-find place so you can access it quickly when needed. Many private lenders offer access to your loans and loan payment schedule via a password and ID on their website, too.

Consider setting up a new repayment plan

If you’re among the majority of student loan borrowers with federal student debt, there are ways to limit your monthly payment — in some cases down to $0 — via income-driven repayment (IDR).

These payment programs cap your monthly bill to a set proportion of your discretionary income. And even better, once the loan term ends, anything you still owe is often forgiven. You can check out our guide to IDR for more information, and your loan servicer should also be able to answer your questions.

And if you don’t need an IDR plan but want to adjust the length (term) of your loan, you can look into extended and graduated repayment plans.

Consider consolidating your student loans

Student loan payment often seems like too much because you may need to make more than one payment each month. Because of how student loans are disbursed, each year is considered a separate loan with a separate payment.

Depending on your situation, it’s possible to simplify matters through federal student loan consolidation. With this process, your loans are grouped together in a way that allows you to make only one payment each month. You can start the federal loan consolidation process by going to the Federal Student Aid website.

Because you could end up giving up the remainder of your grace period, it may make sense to apply for consolidation toward the end of your six months. Carefully review your options to decide if consolidation is the right move for you — you may even consider consulting with a financial professional.

Look into refinancing your student loans

Borrowers can consolidate private and federal student loans through refinancing. In some cases, this could lead to a lower interest rate, which in turn could save you money overall. Good credit is required for refinancing your student loans, so make sure your score is 670 or above. If you have multiple private student loans from different lenders, refinancing with one lender can help you get on top of the payments. It’s often easier to keep track if you only need to make one payment and only have one interest rate.

Caution: What to know before refinancing a federal student loan

Before you decide to refinance federal loans, you should consider what you can lose as a result: Namely, your access to federal benefits like IDR and Public Service Loan Forgiveness (PSLF). Refinancing makes federal loans private, and once a refinance is done, that’s the end of your federal loan options.

Weigh the benefits of a lower interest rate against the possibility that you might need income-driven repayment, PSLF or any other federal benefits later on. If you’re worried about losing access to those options, then you’ll probably want to stick with federal loan consolidation.

Deciding to refinance or consolidate during your grace period can make a lot of sense, since it sets you up to have a repayment plan in place before your first payment is due. Use your grace period to research your options and decide what could work best for you.

Set up your payment process

Now it’s time to set up your student loan payment process. If you still use checks, find out the payment address by contacting your servicer. However, chances are you may prefer to make things easy by using automatic payments.

When you receive the information from your servicer, look for directions on setting up your account for online management. You should be able to receive your statement electronically and make payments online.

Many servicers allow you to pay through their websites, or set up autopay so the money is automatically deducted from your bank account each month. In fact, many lenders offer a discount if you sign up for autopay. The discount is typically a quarter of a percentage point, and while this might not seem like huge savings, every little bit can help you pay less overall on your student loans.

If you decide to set up automatic payments through your bank or credit union, you’ll need information about your loan servicer, including the name and address, as well as your account number.

Once this information is in your financial institution’s system, you can go in once a month to pay your bill, or have your bank or credit union pay it automatically.

That said, if you elect to use autopay, be sure you’ll have enough in your account each month to cover the payment. Otherwise, you could suffer overdraft fees and hits to your credit score.

How student loan payments are applied

Now that you’ve made your first student loan payment, it’s a good idea to understand how your payments are applied.

First of all, if you’re in good standing, your payment goes first to the monthly interest and second toward paying down your principal. Say you have a monthly payment of $452, and your interest each month is $25. That $25 goes directly to your loan servicer, while the remaining $427 goes toward reducing your principal.

If, however, you owe fees due to late or missed payments, those are often applied even before the interest. So if you fall behind on your debt, even less of your monthly payment will go toward principal reduction. Using the example above, if your late fees and previously accrued interest add up to $250, that will come out of your payment first. Your monthly interest is then taken out of the remaining $202, leaving only $177 to reduce your principal.

Note that with IDR plans, the amount of interest that has accrued on your loan(s) may be more than your monthly payment. Per the conditions of your plan, the unpaid interest that isn’t covered gets capitalized — added to the principal balance.

However, for all plans except for Income-Contingent Repayment (ICR), the government covers some, if not all, of your remaining unpaid accrued interest. Consult your loan documents and the Federal Student Aid IDR question page to see how this subsidy would work for your specific IDR plan.

Extra payments

Student loan servicers automatically apply anything extra you put toward student loans to future payments. So if you decide you want to pay an extra $100 each month, it’s not going to automatically reduce your principal; you’ll instead have to ask that it be used towards your principal.

You can save money on interest and pay off your loan faster by putting extra money toward your principal payment each month. However, when you do this, you need to do it right. One of the best ways to ensure extra money goes toward actually reducing the principal on your debt is to contact your loan servicer and specify that your additional payment shouldn’t be used for future payments.

What happens when you miss a student loan payment?

Life happens, and sometimes you just aren’t able to meet your debt obligation. Unfortunately, missing a student loan payment makes your account delinquent and can result in a lower credit score — and your student loans can go into default if you fall too far behind.

Ending up in default not only impacts your credit score, but it can also reduce your access to federal programs like PSLF and FHA mortgage loans. Wage garnishment and tax return refund withholding are two other potential consequences of federal student loan default — plus private lenders can also sue for wage garnishment.

How to avoid student loan default

If you end up in a situation where you can’t make your student loan payments, contact your federal loan servicer as quickly as possible to discuss these options:

  • Deferment, which allows you to delay making payments for up to three years. You can extend your deferment if needed, up to the maximum time allowed. Your interest stops accruing on subsidized loans during deferment but continues accruing on unsubsidized loans.
  • Forbearance, which can be an option if you don’t qualify for deferment, allows you to put off making payments for up to 12 months at a time, with a limit of three years in total. Interest accrues on all federal loans, except for Perkins loans, during forbearance.
  • Income-driven repayment (IDR), as mentioned above, can help you reduce payment amounts so that they’re affordable. If you have a lower income, IDR can provide you with a way to continue making payments without breaking your budget. Before contacting your servicer, check out our guide to picking an IDR, so you’re educated about which plan might work best for you. Our handy calculator can also help you identify a plan likely to fit your needs.

If you have private student loans, you should get in touch with your servicer right away to look into possible solutions. Some private lenders and servicers offer hardship relief and payment plans that can help you find a more manageable payment while you work on your financial situation.

What if you’re already in default?

If you’re already in default, it’s important to contact your servicer to work on a solution. You aren’t eligible for IDR until your federal student loans are current, but your servicer can help you create a payment plan to catch up on your loan and regain good standing. When your loans are current, ask your servicer about IDR and other affordable payment options.

How to report a problem with your servicer

Complaints about student loan servicers are on the rise. Concerns about how payments are credited, as well as lack of information about federal programs and resources, are among the issues borrowers have expressed.

If you feel like your servicer is treating you unfairly, file complaints with the Consumer Financial Protection Bureau (CFPB) and the Department of Education. It’s also possible to contact a student loan ombudsman to help you resolve problems with servicers.

In the end, understanding the student loan payment process can help you be a better advocate for yourself and stay on top of the situation.

Tips for repaying your student loans quickly
Need some more advice on how to repay your student loans quickly? Here are five suggestions below for fast-tracking your loans.

  1. Make extra payments with money from a side hustle
  2. Make biweekly payments to your student loans
  3. Refinance your student loans (use Student Loan Hero’s refinancing calculator to find out what you could save)
  4. Consider a student loan forgiveness program
  5. Double down on your loan payments

Maya Dollarhide contributed to this report.

Interested in refinancing student loans?

Here are the top 9 lenders of 2022!
LenderVariable APREligible Degrees 
2.49% – 11.72%1Undergrad
& Graduate

Visit Splash

2.50% – 6.30%2Undergrad
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Visit Laurel Road

4.13% – 7.39%3Undergrad
& Graduate

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2.49% – 7.99%4Undergrad
& Graduate

Visit Earnest

2.49% – 7.99%5Undergrad
& Graduate

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3.24% – 8.24%6Undergrad
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2.48% – 7.98%Undergrad
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1.74% – 7.99%7Undergrad
& Graduate

Visit Purefy

3.69% – 9.92%8Undergrad
& Graduate

Visit Citizens

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of September 6, 2022.

2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $9 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.


This information is current as of April 29, 2021. Information and rates are subject to change without notice.

3 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 09/09/2022 student loan refinancing rates range from 4.13% APR – 7.39% Variable APR with AutoPay and 2.99% APR – 9.93% Fixed APR with AutoPay.

4 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 3.99% – 8.74% APR (3.74% – 8.49% APR with Auto Pay discount). Starting variable interest rates are 2.74% APR to 8.24% APR (2.49% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

5 Important Disclosures for Navient.

Navient Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 3.99% – 8.74% APR (3.74% – 8.49% APR with Auto Pay discount). Starting variable interest rates are 2.74% APR to 8.24% APR (2.49% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

6 Important Disclosures for SoFi.

SoFi Disclosures

Fixed rates range from 3.99% APR to 8.24% APR with a 0.25% autopay discount. Variable rates from 3.24% APR to 8.24% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

7 Important Disclosures for Purefy.

Purefy Disclosures

Purefy Student Loan Refinancing Rate and Terms Disclosure: Annual Percentage Rates (APR) ranges and examples are based on information provided to Purefy by lenders participating in Purefy’s rate comparison platform. For student loan refinancing, the participating lenders offer fixed rates ranging from 2.73% – 7.99% APR, and variable rates ranging from 1.74% – 7.99% APR. The maximum variable rate is 25.00%. Your interest rate will be based on the lender’s requirements. In most cases, lenders determine the interest rates based on your credit score, degree type and other credit and financial criteria. Only borrowers with excellent credit and meeting other lender criteria will qualify for the lowest rate available. Rates and terms are subject to change at any time without notice. Terms and conditions apply.  

8 Important Disclosures for Citizens.

CitizensBank Disclosures

Education Refinance Loan Rate Disclosure: Variable interest rates range from 3.69%-9.92% (3.69%-9.92% APR). Fixed interest rates range from  4.49%-10.11% (4.49%-10.11% APR). 

Undergraduate Rate Disclosure: Variable interest rates range from 6.39%- 9.60% (6.39% – 9.60% APR). Fixed interest rates range from 6.58% – 9.79% (6.58% – 9.79% APR).

Graduate Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).

Education Refinance Loan for Parents Rate Disclosure: Variable interest rates range from 3.69%- 9.09% (3.69%- 9.09% APR). Fixed interest rates range from 4.49% – 9.28% (4.49% – 9.28% APR).

Medical Residency Refinance Loan Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).