What timeline should college students plan for when it comes to paying off student loans?

My first recommendation when it comes to student loans is to consolidate them and lock in a consolidated rate in the current low interest rate environment. Secondly, the IRS allows you to deduct interest paid on student loans and your home mortgage. Therefore, always pay these debts off only after you have paid all of your other debts (credit cards, car loan etc.). Additionally there are graduated repayment schedules if your income is low out of college but you expect it to rise in the future (which is typical). Hope this helps!

Hi Ian,

This is a good question that a lot of students have. You are not alone. First, I want to start by saying that consolidation is not for everyone. You can on do this with federal students loans, and you can on consolidate a loan once. It's best to do your research and make an educated decision before consolidating.

In regards to paying of subsidized vs. unsubsidized first, you will be required to pay both at once. I will go into this a little more, but before I do, I want to recommend that if you can afford to I would pay the interest on your unsubsidized loans while in school. If you do not, the interest will continue to compound and increase your balance. It will be less expensive in the long run if you are paying the interest as it is added to your loan.

The first thing to know about federal student loans is that they are only in deferment while you are in school, enrolled above part-time. Once you leave school or enroll below part-time and 6 month grace period will begin. If you return to school before your grace period ends, then the clock for your grace period will pause. Once you leave or drop enrollment again, that clock picks up again. For example, if you start out full time in your semester and then drop all but one course, your 6 month grace period will begin and will not pause until you enroll in another full-time semester. If you go full-time throughout your entire degree and don't take breaks beyond what is scheduled into the school year, then you will have a full six months, after graduation, before repayment has to begin.

Once you begin repayment, your payment will be based on paying all of your federal student loans off in 10 years. If this is payment is too high, the federal government does offer different repayments that are based on your income or other factors.

I hope this helps!