Your student loan grace period is a set amount of time between when you graduate, leave school, or drop below half-time enrollment and when repayment must begin. This time frame offers some breathing room for graduates to transition from student life, to the professional working world. While this is meant to be a break, and create opportunity for individuals to get established it is in your best interest to use this time to set yourself up for when the responsibility of your student loans kicks in. Focusing on how life will look, specifically as it relates to your finances, once you have to start repaying what you owe while you have the freedom of not actually having to write a check yet is highly advantageous for anyone with student loan debt.
Get Organized
You can research the do’s and don’ts before your student loan grace period ends to help you get yourself organized. Tracking down all of your student loans is a smart place to begin since these are numbers you probably have not gone over in years you are going to want to view them all in one place and map out details like repayment dates, balance totals, how your interest rate affects your overall amount, and what monthly payments might look like. Using the low-pressure time frame of you grace period can give you months of practice budgeting to accommodate repayment so that when the effective date pops up, your wallet is prepared. Not to mention being financially ahead of the game is never a bad thing.
Federal student aid offers an online repayment estimator that is a great tool for anyone with student debt. This instrument allows you to compare your monthly payment under different repayment plans to help you figure out which one is right for you. Here is where prior organization will also prove beneficial because viewing these estimations on their own will not provide you with a sense of what they mean in terms of your overall budget. However, viewing them up against your personal finances and current budget demands provides a more specific example which allows you to develop and understand your payback strategy on more personal terms.
Establish Yourself
If you did not line a job up during your last semester of college, making this priority number one after graduation is a huge way to take advantage of your grace period. Lenders do not care if you have an income or not once repayment begins, it is starting regardless, so finding steady employment and starting to establish yourself financially is essential. An aggressive approach towards your job hunt is going to lessen the time period where you remain without an income, and the more paychecks you have under your belt when your first invoice arrives in the mail the better. Finding work, and earning an income also lends itself to you being able to create a budget that makes sense for this next stage of life. The budget you lived off in college is no longer applicable to your post grad life and financial obligations. Being able to see how your monthly debt will factor into your overall finances will also help you to make decisions like where you can afford to live while you tackle your student loans.
