If your college graduation is on the horizon and you took out student loans, your first payment isn't far off. Most lenders require you to start paying back the money six months after you graduate or leave school (or earlier), which means you need a plan for making your first student loan payment. In this guide, we cover the steps you need to follow to get educated about your loans, make payments on time and potentially lower your overall debt.
When do you make your first student loan payment?
When you make your first student loan payment depends on the lender and loan.
- For federal student loans, you can defer payments up to six months after you graduate or leave school. The six months is known as a "grace period."
- With private student loans, some lenders require you to start paying back the money right away. Others offer the same repayment schedule as the federal government – six months after you graduate or leave school.
Keep in mind that most student loans will still accrue interest during deferment. Direct subsidized loans are the only exception – the federal government will pay for your interest while you're in school and for the six months after.
You can also always choose to make earlier payments, even if your loans offer the grace period, which could help lower the amount of interest and debt you have.
How to make your first student loan payment
If your first student loan payment due date is on the horizon, these steps will keep you ahead of the class:
1. Know the terms of your loan... and what that means
An educated borrower is a wise borrower. Know these terms to fully understand your loans and payment schedule:
- Principal: The principal is the amount of money, or balance, you have left to pay back on your loan, not including the interest you're charged.
- Interest rate: The interest rate is the fee (expressed as a percentage of the principal) the lender is charging you for borrowing. It can be fixed (staying the same over the length of the loan) or variable (changing, depending on the market). All federal student loans are fixed, while private loans may be fixed or variable.
- Repayment plan: Your repayment plan is the schedule and loan terms by which you'll pay back your loan. For example, a standard repayment plan for federal loans is 10 years.
- Grace period: The grace period is the amount of time you have after you graduate or leave school until you have to begin paying back your loan, typically six months.
- Lender: Your lender is the source of the loan. If you have a federal loan, it's the federal government. If you have a private loan, it's a bank, credit union or other financial institution.
- Student loan servicer: The institution that will receive and process your payments.
2. Know what you owe
You'll want to know how each of the terms above apply to you, how much you owe, how many loans you have, who the loan servicer is, repayment schedule, due dates and grace periods.
If you have federal student loans, you have to complete exit counseling before you graduate, which helps you better understand how interest is calculated, your repayment options, tips and strategies to avoid defaulting, your loans and your loan servicer.
Your servicer should reach out to you prior to your first payment, but be proactive in case they don't contact you. If you don't know who your student loan servicer is, you can visit the National Student Loan Data System.
Private lenders don't require exit counseling. If you're unsure about your private student loans, review your credit report – you're entitled to a free annual credit report.
3. Choose a repayment plan
With federal student loans, you can choose a repayment plan that works for your budget.
- Standard repayment plan: Available to all borrowers, you'll make fixed monthly payments for a term of up to 10 years.
- Graduated repayment plan*: If your payments with standard repayment are too high, you might opt for graduated repayment. Payments start out lower and then gradually increase as your income increases, usually every two years. Available to all federal student loan borrowers, you have 10 years to pay off the loan.
- Extended repayment plan*: If you have a tight budget and you're seeking to lower your monthly payments even more, extended repayment gives you up to 25 years to pay your loan back. However, you'll pay more in interest over the life of the loan. Depending on the type of federal loan you have, some restrictions may apply.
- Income-driven repayment options*: You may qualify for income-based repayment options, including Pay as You Earn Repayment Plan (PAYE), Income Contingent Payment Repayment Plan (ICR), Income-Based Repayment Plan (IBR), and Repayment Assistance Plan (RAP). Your minimum payments are based on your income. Program eligibility depends on when you took out the loans and when you enrolled in the program.
*If you borrowed federal student loans prior to July 1, 2026, you can choose graduated or extended repayment plans, as long as you opt into the program before July 1, 2028. You can also use income-driven repayment plans PAYE and ICR until July 1, 2028. After this point, you'll need to switch to the standard repayment plan or RAP. You can continue to use IBR if you select it prior to July 1, 2028.
If you borrowed federal student loans after July 1, 2026, you can only choose between the standard repayment plan and RAP.
Private lenders don't typically offer repayment plan options.
4. Create a budget
Once you know how much you owe each month, you need to make room for the payments in your budget. To create your budget, write down all of your expenses, including the student loan payments, rent, utilities, transportation costs, groceries and subscription services.
Next, list your income after taxes, subtracting your expenses to determine how much money you have left. If your expenses exceed your income, you'll need to cut costs somewhere. If you have excess money, start building an emergency fund or pay more than your minimum payments towards your student loans.
If you're still months out from making your first payment, saving now could help you get ahead of your expenses. You can also choose to make your first payment early – the sooner you start paying, the sooner you'll be done.
5. Pay on time
Whether it's your first or your 20th, you'll want to make your payments on time to your loan servicers. Late payments can ding your credit score. You can register on the loan servicer's website to find details about your loans, due dates, monthly minimums and accepted forms of payment.
To avoid late payments, sign up for automatic payments, where your monthly payment is automatically deducted from your bank account. It's a set-it-and-forget-it tool, and many servers offer a rate discount – up to 0.25% off – which can add up over the lifetime of the loan!
4 Tips for paying back your student loans
These quick tips can help you stay on top of your student loan payments and potentially save you money and stress:
Choose which loan to pay back first
If you have extra cash each month, you might want to put the money towards your student loans – you'll pay less in interest as a result. If you have more than one loan, you need to determine which you want to pay down first. There are two minds on the best method:
- Debt avalanche: With avalanche, you focus on paying the loan with the higher interest, reducing the amount of interest you pay over the lifetime of the loan.
- Debt snowball: With snowball, you pay towards your loan with the smallest balance. You get a morale boost from paying off the debt, which can motivate you to continue lowering your debt.
The best method for you depends on how you look at your student loan debt. The debt snowball approach can be optimal if checking off the debt will help you stay focused, while the debt avalanche is best if you're really determined to pay less in the long run.
Get help if you're experiencing difficulty
If you can't make your student loan payments, don't ignore it. Contact your loan servicer regarding your options as soon as possible. You might qualify for income-based repayment plans, deferment, or forbearance depending on your situation. Even private lenders offer short and long-term relief programs.
Delaying or ignoring the issue might result in you having fewer options later. Paying your student loans on time is critical to building a strong credit history, which you'll need to reach other goals in your life such as buying a new car or home.
Weigh the pros and cons of refinancing and consolidating
Refinancing and/or consolidating your loans might help you simplify your payments, change your monthly minimums, or lower your interest rate. For example, if you have a strong credit score and steady income, you could qualify for lower interest rates and more favorable terms.
For federal student loans, you can only consolidate your loans into one – unless you refinance through a private lender. However, you will lose access to any federal repayment and protection programs.
With private student loans, you could consolidate or refinance through a lender of your choice, as long as you're approved.
Ready to take control of your student loan debt – and your financial future?
It's important to carefully consider your refinancing options, especially in today's interest-rate environment. Taking time to compare rates and terms can help you decide whether refinancing makes sense for your financial situation and long‑term goals.
Citizens is here to help you navigate your student lending options for today and the future. Make sure to visit our Student Lending page.