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Follow these steps now to prepare for that first payment so that you can start off right and avoid the consequences of student loan default. Keep in mind if you have Stafford loans you are entitled to a six-month grace period after you cease to be enrolled half-time before your first loan payment is due.

STEP 1: Know what you owe

Often students underestimate their outstanding college debt and fail to maintain complete loan records. You may forget that interest accumulates on your unsubsidized loans while you attend school. Create a loan portfolio and regularly check the National Student Loan Database to keep you informed on what and who you owe.

STEP 2: Determine how much you can afford to pay each month

Login to Money Smarts and select the Debt-O-Meter. What you earn tomorrow will pay for what you borrow today. Complete three steps to compare your student loan debt.

STEP 3: Choose a repayment plan that works for you?

There are several repayment options for your Stafford loans. Most borrowers use the Standard Repayment Plan, but using a loan repayment calculator to estimate your payments can help you decide if a different repayment plan is better for you. You may also consider loan consolidation which bundles multiple federal education loans into a single monthly payment and, depending on your total education debt, extends the repayment period. 

STEP 4: Keep in touch

Students who move following graduation should notify their school and lender or loan servicer of any change in their address and telephone number. If this is not done, you may not receive important information about your student loan account and may incur additional charges for missed or late payments and risk severe penalties for student loan default. If you are experiencing financial hardships, don't skip or delay payments, get in touch with your lender or loan servicer to talk about the possibility of deferment or forbearance plans.

If once you enter repayment you encounter financial hardships (such as an illness, loss of job, etc) and anticipate having difficulty making your student loan payment, contact your lender or loan servicer. Often you can request a deferment of payment or forbearance. You never want to NOT pay your student loans. This can lead to student loan default.