Navigating Student Loan Debt

Navigating Student Loan Debt

September 29, 2021

The average American college graduate owes about $39,351 in student loan debt. By the time it sinks in how much you are likely to owe back, you are probably asking yourself, "what have I done?" Although this number likely sounds frighteningly high, there are ways to reduce your debt and create a manageable plan. 

Let's take a look at some of the most important financial steps to reducing that big pile into a manageable monthly payment. 

Step 1. Understand the Terms and Conditions of Your Loan

   a)  Attend an Exit Counseling Interview

Students must attend exit counseling each time they drop below half-time enrollment, graduate, or leave school and enter a repayment period. Exit Counseling is designed to help student borrowers with repayment, as well as to teach them about interest rates, budgeting advice, and financial planning tips so that they can avoid defaulting on future payments. 

   b)  Read Your Loan Documents

It is imperative for students to read their loan agreements in full, including the annual loan fees schedule and any terms and conditions, and understand how much each loan will cost them over the life of the loan. Visit for more information. 

Step 2. Evaluate Your Debt Repayment Options

There are two types of student loans that you can take out.

Private Loans

These are loans from lenders other than the government such as your school, businesses, banks, or credit unions, and the repayment term can be up to 10 years. Since the lenders set their terms, the interest tends to vary greatly from one lender to another, and can be either fixed or variable. Additionally, with a private loan you will be unable to access the loan forgiveness program or government-backed repayment programs. 

Loan Repayment Options 

1.       Refinancing

Refinancing allows you to tweak your loan and the associated schedule. You can change the term of your loan or even lower your interest rate. This involves using your credit score or current salary to negotiate new repayment plans. 

2.       Forbearance

This applies when you can’t afford to make payment. 

3.       Deferment

Some lenders allow you to defer your loan for a limited time. For example, during the period of an internship. People who are attending grad school can also take advantage of this option.

Tip: These options do not cut across all lenders. Find out what method your lender provides.


Federal Loans

These are government issued federal loans to students and they come in three forms, each with a fixed interest rate. An advantage is that you don’t incur prepayment fees. 

1.        Direct Subsidized Loans.

The government will pay any interest that has accrued while you are in school. 

2.        Unsubsidized Loans

With these loans, you can pay the interest accumulated while in school after you graduate. 

3.         Plus Loans

Your parents take up the loan on your behalf. 

Repayment Options Available

Many students enter into regular repayment options blindly, but there are other nuanced options when it comes to repayment plans available. 

 Factors that determine the total repayment amount include:

  • The principle
  • Interest rate
  • Accrued interest
  • Your loan repayment terms 

The repayment options available are: 

1.       Penalty-Free Loan Adjustment

Federal loans allow you to adjust your loan repayment plan at any point without incurring any fee. This will enable you to manage your debt according to your current income.

2.       Standard Repayment Plan

You can set up a fixed amount for repayment. This approach guarantees that you pay the loan within the set timeline. 

3.       Graduated Repayment Plan

Your repayment starts with a lower monthly payment and gradually increases with time. This works best when it coincides with an earning potential that increases as well.  

4.       Extended Repayment Plan

You can opt to increase the length of time for repayment according to how your earning potential changes. 

5.       Income-Based Repayment

This bases the amount you repay on your current income. 

Step 3. Evaluate Your Eligibility for Loan Reduction Programs Available

Loan programs are government funds meant to subsidize student loans. As a reminder, private loans are not eligible for this service. 

The most common program is the public service loan forgiveness program. This program forgives the student debt after repayment of the first 120 payments. 

To qualify:

  • You must work full-time under a qualifying employer.
  • The repayment has to be under the income-based program or the pay-as-you-earn program. 

Step 4. Keep Updated Records

Be sure to create accounts with each of your loan servicers and keep your basic information up to date, including your name, phone number, email address, address, and social security number. Hold onto any correspondence or relevant mail for your records. 

At Triada, we understand that navigating student loan debt can be a confusing process. We also know that the right financial roadmap can help you chart a course between where you are today and where you want to be tomorrow. To continue the conversation about college planning or repaying student debt, please reach out to our team.