Questions to Ask Yourself Before Selecting a Student Loan Repayment Plan

How do you go about selecting a student loan repayment plan

Flickr user Guian Bolisay

Now that you’ve graduated from college, it’s time to start repaying your student loans. There are quite a few federal student loan repayment options out there, so which do you pick? Which one will work best for you? You probably have a number of questions, but here are some questions to ask yourself. Remember, take your time selecting a student loan repayment plan. You want to find one that fits your financial situation best.

What kind of loan(s) do I have?

Certain loans don’t qualify for certain repayment options. For example: Stafford loans don’t qualify for income-driven repayment plans—you’d have to consolidate that loan before you could access REPAYE.

Do a bit of digging into which loans you have and map out which repayment plans are even an option for you at this point. Making an organized chart of your student loans, interest rates, and repayment options is never a bad idea.


What are my projected earnings?

Even if you’re still in school, you can gain a rough estimate of what you might earn after graduation. If you know which entry-level job you’re going to apply to, research the average salaries. If you’re not sure, you can still find the average earnings of graduates with your major. (search for your major right here on College Raptor, and see the average starter salary).

Do I want lower payments and a longer repayment period, or higher payments and a shorter period?

Another way to phrase this question: Do I want to repay this loan fast, or do I want lower and more manageable monthly payments? This question can depend on what your projected earnings are, and what your personal circumstances might be. If you’re living in a low cost-of-living area and have a well-paying job, you may prefer to pay off the loan ASAP, for example. But if cost of living is high and the paycheck is low, it may not be feasible and the better option may be in extending the life of the loan. Don’t stretch yourself thin trying to pay back loans, or else you’ll find yourself in a more stressful situation.

Am I going to work in a public service field?

If you’re planning to work as a teacher, for the government, for the military, or a non-profit organization, you may qualify for the Public Service Student Loan Forgiveness program (PSLF). After ten years of consistent payment, you may find the remainder of your loan forgiven!

Am I planning to consolidate?

Consolidating all of your federal loans into a single Direct Consolidation Loan can help make payments more manageable. However, the terms and conditions of your loan will change. You may not be eligible for certain perks or payment options anymore. Weigh the pros and cons before making this decision.

After you ask yourself these questions, hopefully you’ll be more confident in selecting a student loan repayment plan.

And if you’re looking to refinance or consolidate your loans with a private lender, be sure to check out our helpful guide!

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