How College Grads Can Pay Off Student Loans

May and June marked a major milestone for millions of Americans: college graduation. Upon donning their caps and gowns and walking across the stage to receive their degree, graduates may be met with a strange mixture of emotions. That often includes relief and jubilation, but also a new form of anxiety. That's because graduation is often the point at which student loans must begin to be repaid. For graduates who still need to find a reliable source of income, this can be a stressful period. To pay off your loans without sacrificing other financial commitments, know the basics of debt and personal financial management.

Know your loans

As you're probably already aware, if you applied for academic loans, they come in two types: federal and private. Before beginning the repayment process, it's essential to know the terms of the loan, including when and how you will need to pay them back.

If you applied for federal student loans, these come in one of three types:

• Direct subsidized or unsubsidized loans.
• Direct PLUS loans (for graduate and professional degrees).
• Federal Perkins loans.

No matter which type of federal loan you have, according to the U.S. Department of Education, which extends and manages these loans, repayment comes with at least a six-month grace period  after graduation. For those graduating in the spring of 2017, that means federal loans will not be due for repayment until at least November or December 2017, depending on your graduation date.

For federal borrowers who are not able to repay after the grace period, payment may be further delayed or reduced pending an application. And graduates who pursue a career in a public service role may be eligible to have some of their federal loans forgiven. Federal aid recipients should check with the Department of Education for more information.

Private loans are those secured through any other institution that is not the U.S. government. These programs each have their own repayment terms and conditions, so it's important to check with your specific loan service to know how repayment is structured.

Know the basics

Once you graduate, the first step prior to beginning repayment is to certify your loan servicer has your correct contact information. Keep your address, phone number and email up to date to ensure you don't miss any important communications.

During the grace period of your federal loan, you may be able to select a specific payment plan. According to The New York Times, financial advisors usually suggest graduates select the plan with the highest monthly payment they can afford . This will allow debt to be repaid faster, thus accumulating less interest and potentially saving hundreds or thousands of dollars over time.

If you are unable to begin paying your loans as soon as the grace period ends, federal loans do allow borrowers to request deferment for an additional period of time. Loans may also be restructured under a customized payment plan that may be ideal for borrowers with lower-paying jobs. These plans allow payments that are more aligned with monthly earnings. Borrowers will need to provide some personal information, including tax return data from the IRS, to submit a request for these programs.

Grace periods and payment plans vary for private loans depending on the financial institution. However, most private loans also include grace periods and the ability to establish more flexible payment schedules. Borrowers should stay in close contact with their lenders to work out any new payment structure.