Congrats to the Class of 2025! Read on for a quick guide for recent grads on managing student loans, building credit, and getting the strongest possible financial start now that school’s done.
Most students who leave or finish school have a six-month grace period before they need to start making payments on their student loans. Keep in mind that interest is still accruing during this grace period, and remember to use these six months to investigate repayment plan options so that you’re reading to start making loan payments when the grace period is over.
Depending on the loan in question, recent grads may have a few options when it comes to repaying a student loan. The standard repayment plan means your monthly payment amount stays the same for the entire time you’re repaying the loan, whereas a graduated plan allows for lower payments at first, with an increase over time. Some grads may also be eligible for an income-driven repayment plan, which means monthly payments are calculated based on income and family size. Check out studentaid.gov to learn more about your loan repayment options.
If you’re juggling a number of loans, you might consider a consolidation loan which bundles multiple loans into a single monthly payment with one interest rate. Ideally, this interest rate will be lower than whatever rate you’re currently paying on any one loan. Always read the fine print very carefully when considering a consolidation or refinancing option, and remember that consolidating federal loans into a private loan may result in repayment options, including deferment and loan forgiveness programs.
After graduation, life can be a little bit up in the air. You might be job-hunting, packing up your apartment, or even moving to a new city. While the post-grad moment may feel like a tricky time to start budgeting, it’s possibly the most important time to build a budget. Play around with a few apps, or pull out a pen and paper to map out your income and expenses. A good budgeting habit can help your financial wellness for decades to come, and it starts now.
Some new grads are already keeping tabs on their credit score, while others still aren’t quite sure what a credit score is. Wherever you are on your credit journey, use graduation as an opportunity to learn more about credit and get more diligent about regularly reviewing your credit report and history. Your credit score determines what financial products you qualify for and your interest rate; and, checking your credit report can help you spot fraud or identity theft sooner.
Finally, graduation is a great time to start an emergency fund. An emergency fund can protect your credit and overall financial wellness by providing a savings cushion. That way if your car suddenly needs an expensive repair, or you get the job interview of a lifetime and need a plane ticket ASAP, you’ll be covered. Experts recommend saving three to six months of living expenses in your emergency fund, but it’s also okay to start small and build slowly.