By Tahir Jaffri

For most college students, graduation is a time of new beginnings. For those who have taken out student loans to help pay for higher education, it’s also time to begin repaying those loans. For the nation as a whole, there’s a lot of money to repay; according to federal statistics, at the end of the third quarter of 2021, outstanding student loan debt stood at $1.58 trillion. On an individual level, the numbers are also significant. According to research by the College Board, in the 2019-2020 academic year, the average, cumulative debt load of those who had student loans and who received a Bachelor’s Degree was $28,400.

And repaying that debt as soon as practicable is important. For a recent graduate, typically beginning a lifetime career, the burden of student debt can have long-term consequences. Further education, job prospects, and saving for common goals such as retirement and buying a home are all affected by student debt.

So, what are some of the ways to repay this debt?

The vast majority of student debt in the U.S. is provided through programs run by the federal government, via the U.S. Department of Education. Recognizing that new graduates may have difficulty getting started in a career, the federal government has a number of ways this federal student loan debt may be repaid.

Standard repayment – Payments are a fixed amount that ensures that the loans are paid off within ten years.

Graduated repayment – Payments are lower at first and then increase, usually every two years, in an amount that will ensure the loans are paid off within ten years.

Extended repayment – Payments may be fixed or graduated and will ensure that the loans are paid off within twenty-five years.

Other options include revised pay as you earn, income based repayment, income contingent repayment, income-sensitive repayment, and federal student loan consolidation.

Other student loans come from a number of sources such as home-equity loans, credit card loans, loans from parents, signature loans, or loans from the college or university itself. Repayment of these loans is subject to the terms agreed when the loan was made.

In certain situations, it may make sense to combine all federal student loans into one, consolidated private loan. However, doing this will eliminate any possibility of the federal debt being forgiven for public service employment.

The ultimate goal is to pay off all accumulated student debt as quickly as possible. Not only does this save money (less interest is paid), but paying off the debt allows the borrower to quickly move on with his or her life. Steps to achieve this include organization, making payments while still in school, budgeting carefully, making more than the minimum payment or making payments every two weeks.

Help when you need it is always available. Tax breaks are a possibility, under current federal law, up to $2,500 in higher-education loan interest can be deducted from your taxable income. Certain limits apply. Borrowers also have access to the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. The CARES Act provided relief for student loan borrowers whose debt is owned by the U.S. Department of Education. Under the Act, for the period from March 13, 2020 to September 30, 2020, these loans were placed in “administrative forbearance,” with a 0% rate of interest, allowing borrowers to stop making payments. This relief has since been extended and is still a work in progress.

Navigating the maze of student loan debt repayment options and strategies can be confusing. There’s no shame in asking for help when it’s needed. The advice and guidance of qualified student loan advisers or other qualified financial professionals is highly recommended.