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After you graduate, it comes time for you to start repaying your student loans. However, even with the courses that many student loan servicers (such as Great Lakes) require students to take before they sign up, figuring out how and when you can start repayments on your loans can still be a little confusing.

How Do You Repay Student Loans?

There are three main phases of student loan repayment, although most people are only aware of the first two. The three main phases of student loan repayment are the in-school period, the grace period and the repayment period and students have a variety of actions they can take during each period in order to make repaying their student loans easier.

The school period

Students are considered “in school” if they’re enrolled in classes at least half the time (6 credit hours per semester). During the school period, students are not required to make payments on their student loans — their studies should be the top priority, instead.
In most cases, students only need to make down payments on their loans if they choose to. However, in some programs, students who do not pay off the interest on their student loans will find it added to the amount of the loan when it enters repayment. Whether or not you choose to make interest payments on your loans depends on you — look into the company that services your student loans and decide if making interest payments is right for you.

The grace period

The grace period is usually the time between graduation and the time that the first payment on your student loans is due. However, the grace period can also come into effect if a student drops below 6 credit hours per semester. So what is the grace period for a student loan? For most student loans, the grace period is six months, although this length of time also depends on the loan program.

During the grace period, you should focus on creating an account (or accounts, if you have multiple loans) with your student loan servicer and exploring the payment plans or payment options available to you. Try to aim for paying off your loans in full, if possible, or making at least the minimum payments. However, if that’s not possible, other options, such as income-driven repayment (IDR), exist.

The repayment period

Before repayment begins, you will receive a repayment schedule from your loan servicer or servicers. When you receive your repayment schedule (or when you go through your loan servicer’s exit counseling), ensure that they have your updated address and contact information. If you can, set up electronic payment or an automatic withdrawal from your debit card — not having to worry about payments and when they’re due will take away a lot of the stress associated with student loans.

If you’re unable to make your payments as they’re specified in your repayment schedule, contact your student loan servicer and see if you can change how you’re currently paying your loans. If you’re unable to make the minimum payments, see if your loan servicer has IDR options available — an IDR plan means that your payments cap at a certain percentage of your income, usually about 10 percent.

Another option is to place your loans in a deferment status. Deferment is much like the school phase we talked about earlier: you’re not required to make payments on your student loans, but interest continues to accrue on the principal amount. It’s best to only use deferment sparingly — when you absolutely can’t make your payments, even on an IDR plan.

Once you pay off your loan, your loan servicer will send out a confirmation to you that you’ve made your final payment and that your loan is paid off. A similar notice will be sent out to each of the major credit reporting agencies, informing them that your loan has been paid off.

After you’ve made the last payments on your loans, that’s it — you’re done. Out of the three, the repayment phase of the student loan process is probably the easiest: just make your payments each month and you’ll be fine. Keep an eye on your monthly payment amounts, adjusting them as necessary and before you know it, you’ll be all paid off.

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