How much debt can you repay?

To repay your student loans, try to keep your monthly student loan payment at 10% or less of the net monthly income you plan to earn after you finish school. (Your net income, or take-home pay is the amount you earn after taxes, insurance, or other costs that have been subtracted from your gross income, the total amount you earn.)

If you aren’t sure what your expected net income will be, then assume that that net income is 20% less than your expected gross income.

graduation cap with money symbol

How much do you think you’ll be able to handle in monthly student loan payments? Use the repayment calculator on the Federal Student Aid website ( to estimate the monthly payment for federal student loans.

Be realistic about what your salary will be after graduation. Before you borrow, estimate the amount of debt you’ll be able to handle without a lot of financial stress. Never borrow more than you need and try to keep your payments as low as possible.

Repaying your student loan

When it comes to making student loan payments, your main goal should be to make payments on time and save on late fees. Here are some tips to make your payments a little less painful.

Get your degree. Students who complete school are less likely to have trouble making their monthly payments. A college degree can lead you to a higher paying job and open the door to a new career.

Ask your lender if they can automatically deduct your payments from your bank account. Also, ask if they offer an interest rate discount for making automatic payments.

Try to get other bills paid off during the grace period (usually six months) before your first student loan payment is due. That will help you to repay your student loans when the time comes.

Try to get other bills paid off during the grace period (usually six months) before your first student loan payment is due. That will help you to repay your student loans when the time comes.

If you’re unable to make a monthly payment, call your lender right away. Discuss options to postpone payments or adjust your repayment plan. To learn more visit the deferment or forbearance page on the Federal Student Aid website.

yellow piggy bank

how to postpone student loan payments

Student loans are legal obligations. The money you borrow must be repaid, with interest, just like car loans and mortgages. If you’re having financial problems that make it difficult to repay your student loans, don’t panic — but do contact your lender. They can explain your options to help you to avoid problems with both late payments and default.

If you have Federal Stafford Loans, you need to complete exit counseling shortly before you graduate, withdraw, or drop below half-time status. Exit counseling gives you information on managing your student loans when they become due. Check with your school to see if you can complete your counseling online or need to do it in person.

With most student loans, you start making payments six months after you graduate, leave school, or — for federal loans — drop below half-time enrollment status. You will receive your first billing statement about 20 days before your loan enters the repayment period and your first payment is due.

There may be ways to temporarily postpone your repayment if you are having financial difficulty, going back to school, or are in military service.

The two most common ways to temporarily postpone repayment of your loans are deferment and forbearance. These can help you avoid becoming past due on your loans. If you are already past due, your lender may have deferment or forbearance options to keep your loan from defaulting.

Both deferment and forbearance allow you to temporarily cease making payments, or to make smaller monthly payments than required by your repayment schedule.

Deferments are for federal loans only. A deferment is an entitlement, meaning that it must be granted if you meet specific conditions.

Economic hardship deferment- You must earn less than the federal minimum wage or exceed a federally defined debt-to-income ratio.

In-school deferment- If you return to school after your loan enters repayment, you may be eligible for an in-school deferment. If you have Federal PLUS Loans for graduate and professional students, your lender will give you this deferment after your loan is disbursed. You must be enrolled at least half-time at an eligible school. If you’re attending a school outside the United States, you must be a citizen or national of the United States.

Unemployment deferment- You must be seeking but unable to find full-time employment. Full-time employment is defined as at least 30 hours of work per week that is expected to last at least three months.

Education-related deferment– You must be engaged in a graduate fellowship or internship/residency program.

Forbearances are for federal and private loans, and are granted at the discretion of your lender; you’re not automatically entitled to it.

Interest continues to accrue during a period of deferment or forbearance. (Subsidized Federal Stafford loans are an exception: the government pays the interest that accrues during a period of authorized deferment.) You’re responsible for paying interest that accrues on an unsubsidized student loan (federal or private) when your loan is in a deferment or forbearance. You may make interest payments while your loan is in a deferment or forbearance. Otherwise, it will be capitalized (added to the principal balance) when your deferment or forbearance ends.

Because interest continues to accrue, you may end up increasing the total amount you repay. However, paying more over the life of the loan is better than the long-term consequences of delinquency and default. Plus, by postponing your student loan payments, you may increase your monthly cash flow, which can help you manage everyday expenses like rent, insurance, and even groceries.

Talk to your lender. You may be able to choose a different repayment plan to fit your financial situation. You may be able to lower your current monthly payments with a plan that allows you to pay just the interest, bases your payments on your current income, or allows you to make smaller payments now and bigger payments later.

Remember, if you’re having difficulty repaying your student loans, it is important to contact your lender as soon as possible to discuss your options. They can answer your questions and help you deal with your unique circumstances.

female student thumbs up

student aid for graduate students

The Federal Stafford Loan and Federal PLUS Loan programs can provide graduate and professional students with sources of funds.

A Federal Stafford Loan has a fixed interest rate that is lower than the Federal PLUS Loan interest rate and a credit check is not required. However, a Federal Stafford Loan has an annual loan limit.

With a Federal PLUS Loan a credit check is required, but you may borrow up to your full cost of attendance, minus any other financial aid you receive (including subsidized and unsubsidized Federal Stafford Loans, scholarships, and certain fellowships). Federal PLUS Loans have a fixed interest rate that will not change throughout the life of your loan.

Both the Federal Stafford Loan and the Federal PLUS loan have loan fees that equal a percentage of the loan amount. The fees are deducted proportionately from each disbursement of your loan.

You must first accept the maximum amount of Federal Stafford Loan before you receive a Federal PLUS Loan.


  • You must be enrolled at least half time in a graduate or professional program (for example, a program that leads to a Master’s Degree or to a law or medical degree) at a school that participates in the William D. Ford Federal Direct Loan (Direct Loan) Program
  • You must meet all the other general eligibility requirements for the Federal Student Aid programs; and
  • For a Federal PLUS Loan, you must not have an adverse credit history (a credit check will be done).


To apply for a federal loan, you must first complete the Free Application for Federal Student Aid (FAFSA). After you complete the FASFA, your school will tell you how much you are eligible to receive in federal aid.

Then it’s up to you to decide whether to apply for a Federal Stafford Loan or Federal PLUS Loan or both. Once you decide, you’ll need to complete a Master Promissory Note. You’ll receive your funds through the federal government (Direct Loan Program).


Remember: Student loans must be repaid, with interest, just like car loans and mortgages. Loans are legal obligations, so carefully consider the amount you’ll have to repay before you take out a loan.

You won’t have to start repaying a Federal Stafford Loan until six months after you graduate, leave school, or drop to less than half-time enrollment. The first payment on a Federal PLUS Loan is due within 60 days after the loan is fully disbursed. There is no grace period for Federal PLUS Loans.

However, your lender will postpone the date your repayment starts with an in-school deferment. With an in-school deferment, you aren’t required to make payments while you are in school at least half time and for six months after you graduate or leave school, or drop below half-time enrollment.

For further information, visit the Federal Student Aid website at

gray checklist