Managing Student Loans: A Year-by-Year Guide for College Students

managing student loans

Many students only think about their student loans once a year as they go through the annual financial aid application process. College life is full of things that keep you busy, and we know that student loans may not always make it to the top of your list. To help, we narrowed down some top student loan considerations to think about as you move through your college years.

Freshman Year

As you enter your freshman year, you’ll make critical decisions about the types of loans you take out and the amount you will borrow. Take the time to learn about the terms, types and differences among different loan programs. This may sound basic, but it’s important to remember that you will have to pay these loans back after you leave school. Your school’s financial aid office is a great resource. They will help ensure that you take out all the federal loans you are eligible to receive before considering loans from other sources.

Before you receive your loan funds for the first time, you will go through Entrance Counseling. For most students, this is an online session. After your loans are disbursed, you will receive the name(s) of your loan servicer(s) and their contact information. It’s a good idea to sign up for an online account with your loan servicer(s) using your permanent email address so you can receive specific information from them about your student loan accounts.

Fast Facts: Federal Loans are made by the U.S. Department of Education. Eligibility requires a FAFSA and is determined by your Financial Aid Office. Private student loans differ in that they are provided by banks, credit unions, and other financial institutions and can be used if additional funding is needed to cover college costs after financial aid is awarded. In most cases, a cosigner is required.

Fast Facts: Some private loans provide rewards to students who achieve good grades. Make sure to follow the directions for grade submission each year, if you qualify. Federal aid requires that you make Satisfactory Academic Progress toward your degree. More information will be provided by your Financial Aid Office.

Junior Year

You started hearing from your student loan servicer(s) when you first received your federal and/or private loans. As you move through school and continue to take out loans, these communications become more frequent and more specific about your loan levels and repayment. If you haven’t done so already, know who your servicer(s) are and carefully review the information they send you. Their relationship with you is much more than a company that processes your payments. Your servicer(s) will work with you throughout your loan repayment period, which extends years after you leave school. If you run into financial difficulties, they can also work with you to help you stay on track. You’ll also want to avoid “loan creep” as you move through college. It’s easy to become so used to borrowing that you may take out loans to cover expenses you might not have otherwise considered.

Fast Facts: For most students who take out loans to pay for college, the investment will pay off. Studies show that college graduates earn 70 percent more than those with a high school degree. (Source: Current Population Survey, U.S. Department of Labor, U.S. Bureau of Labor Statistics)

Senior Year

You’re now receiving very specific information about your loans and your upcoming repayment from your servicers. This might feel overwhelming since loan repayment is long-term and it can be complicated. Federal loans often have a variety of payment choices. There is a standard 10-year plan, but also options to extend that term depending on the amount you borrowed.

During your senior year, reach out to your servicers to learn more about your loans and your repayment options. Most servicers, as well as Federal Student Aid (), have calculators you can use to see what your monthly payment will look like when you leave school.

You may be eligible for lower payments as you get started in your career or for payments based on your income. If you are planning to work in the non-profit, not-for-profit or government field, you may qualify for Public Service Loan Forgiveness after a certain number of years. You may also choose to consolidate your federal loans.

Private loan terms were selected when you took out your loans. If your interest rate can be lowered, or you would like to have one monthly payment, you may choose to refinance your existing student loans into one new loan to simplify repayment after you leave school. Do your research to decide whether this option is right for you.

Your Financial Aid office will also provide links to Federal Exit Counseling where critical information will be provided about loan repayment as you get close to your graduation date.

When it comes to managing student loan debt, there are a number of ways you can pay back loans while also building a healthy financial future. Staying in touch with loan servicers, keeping current on your loans, and being aware of the options available are some of the best ways to stay on track when you’re in school and after.

By Anne Del Plato

About the Author

Anne Del Plato is the Regional Director for and is an expert in many aspects of financial aid, student loans, and debt management. Anne’s experience includes positions in a number of areas of higher education finance including college financial aid offices, training and outreach development for a state financial aid agency, and most recently, as a Regional Director of Nelnet’s Partner Solutions team. Anne has spoken at numerous financial aid conferences across the Northeastern United States.


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