The late nights of studying for final exams may be in the past, but a new challenge — capable of far more sleepless nights — rears its ugly head: student loans. Soon after you shelve the graduation robes, repayment notices will make their way to your mailbox. But, for many student loans, you’ll have some time before you actually have to start paying.

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Depending on whether a student loan is federal or private, college graduates can expect a range of repayment options. Letters in the mail will alert student-loan borrowers to these options and when their first payment is expected.

The terms of federal student loans vary less than that of private loans, which are subject to the agreements with the lender.

In the initial notices of repayment, federal loan servicers typically lay out two primary repayment plans. The standard/level payment plan calls for a fixed monthly payment for the next 10 years. The graduated payment plan starts off with smaller monthly payments, which increases as the years pass, over a 10-year period. For Stafford loans, repayment begins six months after graduation; for Perkins loans, nine months.

In the long run you’ll likely end up paying less interest with the standard/level payment plan, but the monthly payments may be larger.

Other options are available based on a group of circumstances. Loan balances larger than $30,000 may be eligible for the extended repayment plan, which reduces the monthly payments and lengthens the repayment period but ultimately results in more interest paid.

Loan payments may be suspended, or deferred, under certain circumstances, such as re-enrollment in school, unemployment, economic hardship or active deployment in the military. Additionally, there are income-based repayment plans that cap the monthly payment to a certain amount to make it more affordable based on your income level and family size.

Private student loans come with their own payment plans and options to postpone repayment that can vary too — the terms should be explained in repayment notices. Again, the least costly repayment plan is likely to involve fixed payments that apply to principal.

Loan servicers will offer the chance to make payments online, by phone or mail.

Don’t be overwhelmed

It’s difficult not to be nervous when you think about how much money you have to pay back. Many others were, are and will be in your position. According to the Consumer Financial Protection Bureau, the total outstanding balance of all student loans in the U.S. has exceeded $1 trillion.

Loan servicers may impose a deadline to pick a payment plan — not choosing one would mean that the servicer can pick one for you. So, it is best to select the one that best matches your financial situation.

Gathering information about all your student loans and evaluating your finances in their entirety is necessary to begin planning for repayment. Using free personal financial management tools such as or ReadyForZero can help keep track of multiple loans, their balances, interest rates and due dates.

For many student loans, you will have several months in which to prepare your repayment strategy and establish steady sources of income.

If possible, making pre-payments or extra payments will help reduce the final amount of interest paid over the life of the student loans.

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