With the price of college increasing, it seems unavoidable that students will have to borrow money to complete their education. Federal student loan repayment is something millions of graduates are dreading. So how do you actually go about repaying student loans after you’ve received your diplomas?

It’s not as difficult as you might think. Just follow these steps to set up your federal student loan repayment!

The Strategy Required for Repaying Student Loans – Federal

First, debt repayment depends (largely) on the kind of student loans you have: federal vs. private.

Step #1 – Choose Your Repayment Plan

The first step in starting your repayment is to actually choose your payment plan. If you haven’t spoken to your loan servicer about what plan is best for you (more on that later!) or didn’t choose a repayment plan already, you were probably opted-in to the Standard Repayment Plan. Take a look at Federal Student Aid’s overview of repayment plans to get an idea of what options are available to you.

But what if your repayment needs change? One of the great things about federal student aid is that you can actually change your repayment plan whenever you need. This can help ensure that you are able to make your payments while giving you control over how and when you pay.

Step #2 – Find Your Loan Servicer

The next step in repaying your student loans is to find your loan servicer. You won’t be writing a check to the government each month, you’ll actually be working with a financial institution who handles your loan. You can find your loan servicer through logging in to the FSA website – it’s that easy!

Why do you need to know your loan servicer? Since your loan servicer oversees your repayment, they are who you will contact if you need any assistance with your loans. This includes changing your repayment date or setting up automatic debits so that you never miss a payment. Plus it's best to actually know these things instead of it being some nebulous question in the back of your mind (getting answers to queries like that is #adulting folks.)

Step # 3 – Track Your Payments

The next step is to actually make your monthly payments. You should take an active role in your repayment schedule – set up a reminder on your phone, mark your payment date on a calendar, or set up automatic debits so that you don’t miss a payment.

You should also consider using a repayment tracker to help you visualize your progress. Download our FREE debt repayment tracker here!

Other Federal Student Loan Repayment Resources (by our editor, Lauren, for Student Loan Hero)

• American Education Services [AES] Information and Resources for Borrowers
• 3 Reasons Student Loan Debt Forgiveness Isn't a Magic Bullet for Debt
• Are you Eligible for a Pell Grant?
• What You Need to Know About that “Master Promissory Note” You Signed

The Strategy Required for Repaying Private Student Loans

Having large-but-necessary debt from a college education can make it hard to save money for other things: retirement, fun trips, home ownership, your kid's college…. the works.

Which is why in trying to bone up on my student loan resources on this site I wanted to highlight both people (read Lauren's friend Kayla's story on how she paid off $91k in student loans in under three years) and great options for those looking to reduce their loan debt.

We've covered this before, but debt is very expensive. Sometimes (as in the case with student loans,) it is unavoidable, but we should try to save money and grab the lowest interest rate where we can. Lower interest rates = less money spent on interest over the life of the loan.

Here's a little math for you:

Say you have $40,000 in student loans at 9.9% interest and ten years left on your repayment. By refinancing to a 7% interest rate, you lower your monthly payment by $100 and save over $13,000 in interest over the next ten years.

$13,000! Yes, that is a downpayment on a house.

There are two strategies for private loans:

1. Refinancing (vs. debt management or debt consolidation) is often the best, easiest option.
2. Getting aggressive with a debt plan, a la Lauren's $8k in 90 Day Challenge.

One Refinancing Option + Why You Should Choose Upstart

Very few platforms allow you to apply for refinancing such ease. Here's a handful of other reasons why I love this option:

• Borrow $1,000 to $50,000 at fixed rates from 4.66%
• Rates that consider education, work history, and earning potential to supplement your credit profile
• Get your rate in 2 minutes without affecting your credit score!
• No prepayment penalties or hidden fees (this is huge, you should be able to pay off your debt WHEN YOU WANT, WHENEVER YOU WANT! Insist on it!)

Upstart offers (to those who qualify) interest rates lower than many private lenders (Starting at 4.99%). Just make sure whichever route you go that you are getting a LOWER interest rate than what you had before, otherwise you won't be saving any money.

And then ask yourself, how much money are you leaving on the table by not researching potential refi options? Click here to explore your options with Upstart.

Having Trouble?

If you are still having trouble repaying your loans, talk to your loan servicer about the options available to you. It may be possible for you to defer your loan payments for a few months while you get on your feet. Another option is loan consolidation – combining the balances of your multiple student loans to one monthly payment. This will take some of the hassle out of getting multiple payments organized each month. 

Other Private Student Loan Repayment Resources (by our editor, Lauren, for Student Loan Hero)

• Follow these ultra easy, frugal tips for one year to pay off student loans faster 
• Do I have to pay my private student loans while I'm still in school?
• Where to go for personal help with your student loans

It's the age old millennial conundrum: do I pay off student loans or buy a house? Do I have to wait for one to achieve the other? It's a great question, but before we can even begin shopping for a home and going over the ins and outs of the home buying process, we need to talk about what it takes to financially prepare for home ownership. With student loans and stagnant wages for millennials, it's no longer realistic to say you need to be debt free in order to buy a home, but if you have a lot of it, paying down debt is an important thing to attempt before you buy a home.

Paying down debt has big home buying benefits: it raises your credit score, and frees up money in the budget for a mortgage payment and upkeep. Breathing room is always a good thing.

Should I be Repaying Student Loans or Saving Up to Buy a Home?

It's the age old millennial conundrum: do I pay off student loans or buy a house? Do I have to wait for one to achieve the other? It's a great question, but before we can even begin shopping for a home and going over the ins and outs of the home buying process, we need to talk about what it takes to financially prepare for home ownership. With student loans and stagnant wages for millennials, it's no longer realistic to say you need to be debt free in order to buy a home, but if you have a lot of it, paying down debt is an important thing to attempt before you buy a home.

Paying down debt has big home buying benefits: it raises your credit score, and frees up money in the budget for a mortgage payment and upkeep. Breathing room is always a good thing.

If you (somehow!) didn’t know, one of the triggers for me starting my financial journey was a whopping $10,000 in credit card debt due to a shopping addiction. You can read the spark notes of my story here. That all being said, I am very passionate about helping others learn how to manage and pay off their debt.

Everyone’s relationship with debt and credit is different, but there are four crucial steps everyone needs to take in order to begin paying off debt.

Know Your Debt

This sounds silly, but it is really important. If you don't know the answers to these questions, you're doing something wrong:

• Do you know all the different types of debt you're responsible for?
• Do you know your current debt balance?
• What about the interest rate?

Knowing simple answers like these will help you to understand what you will really pay in interest over the course of debt repayment. Use a debt repayment calculator like this one from Credit Karma to help you see the big picture of your debt. You can also use this tool to set goals for yourself, such as seeing what minimum monthly payment you should make to pay off your debt by a certain date.

Pay Down Debt & Get Budget-Friendly

Saying you’re going to put “X-amount-of-money” towards debt each month is great, but may be harder to achieve if you’re chronically strapped for cash. If you’ve got a new monthly payment amount, it’s time to update your budget.

I also recommend updating your budget any time you’ve got a big money priority change like debt repayment, buying a home, etc. By tackling your money this way you’ll notice all the weird stuff you spend too much money on!

Be Honest

No one likes to be the party pooper who can’t afford to go out for drinks, but sometimes it’s a necessary evil when you're trying to cut back. Learning to say no to temptation (and friends) can be hard, but it will help you keep your eye on the prize. Hopefully your friends will understand, and maybe you’ll even inspire a few others to join you. That being said it is important to allow yourself to still have fun. Debt burnout is a real thing and can seriously disrupt your goals.

Maybe instead of going out for drinks your friends can have a cocktail night in – cheaper and ultimately more fun since you can wear pajamas instead. 😉

Having a clear idea of your budget can help when it comes to calculating how much home you can afford.

Learn From Your Mistakes

If you’re like me, you likely can pinpoint what you spend most of your money on. You know that whole “say no to temptation” thing I just talked about? If you know that you constantly overspend on groceries, make a list and stick to it!

Online shopaholic? Remove your credit card details from Amazon so you have to manually enter it to make a purchase. Don’t let yourself get comfortable spending too much “just in case.”

More Tips to for Repaying Student Loan Debt Fast

When looking for guests for Season 2 of Awkward Money Chat, I put out a notice in my bi-weekly newsletter. I was looking for guests with interesting money stories and tips to share, and LBMT reader Gina answered the call. Her story? She's got a whopping $78,000 in student loan debt she was ashamed to tell people about.

Well…now that secret is out.

Gina wanted to “out herself” with her debt, but also wanted some tips on how she can start tackling her big debt mountain. I offer additional debt payoff tips in the video below!

• Set Up an Emergency Fund (3 months, 6 months if you feel super anxious about your finances)
• Set Small, Manageable Goals
• Create a debt payoff plan that allows for both debt repayment and savings.
• Cut Expenses (See here for two creative ways to hack your budget.)
• Make Extra Money (Gina plans to use her comic book/graphic art business as a side hustle. Click here to learn how to start a side hustle of your own!)
• Fill Out Online Surveys. Here are the ones we like.

Have another tip on repaying student loans? Let us know in the comments!