The age-old question for any recent college graduate is “How am I going to pay back all these student loans?” Actually, this question is not an age-old question because skyrocketing college loan debt has only been a problem the last decade. With college cost exceeding $25,000 per year, it is becoming increasingly difficult to pay back these God-forsaken loans.

So, how are you going to pay back these loans? The answer is quite simple:

1. You can pay the minimum required loan payments and pray for the best.
2. You can dump hundreds of dollars each month towards your loans and live off microwaved noodles and mold from your parents’ basement.  Or…
3. You can actually budget and make a realistic plan to pay back your loans without sacrificing your 20’s.

Know How Much You Owe

This is honestly the hardest step. So get your beer, wine, or hard liquor of choice and follow these steps:

1. Deep breath.
2. Click on this link.
3. Don’t forget to breathe.
4. Click “financial aid review”.
5. It will prompt you to log in.
6. Create a login or ask your mom what the login credentials are (let’s be honest, she handled all this for you).
7. Reset your password because your mom forgot.
8. Ok, you’re in!!!
9. Drink heavily after seeing how much you owe.

Once you have access you’ll see all the outstanding loans. If you’re lucky, the loans will be  under the same service provider. Simply click the loan number and you can view the full details from the interest rate to the outstanding principal. I have nine outstanding loans all under Fedloan servicing (eight semesters of undergrad and my graduate loan).

Should I Consolidate?

Having nine loans seems scary, but should you consolidate? This really depends on your circumstance. If you are the unlucky person to have several service providers then you should consider consolidating. There is nothing worse than having to remember multiple logins just to make your monthly payment to your student loans.

If all your student loans are under the same service provider, then you can make one flat monthly loan payment to cover all the loans simultaneously. Chances are this payment will be insanely high because the default is a ten-year repayment period. If you have gone past your grace period, you’ll probably get an email notifying you that you have to come up with an ungodly amount of money in the next few weeks to cover your first loan payment.

I am lucky enough to afford my loan payment and I pay close to a mortgage every month. I want to pay my loans off before I’m 30, so I chose the 5-year route. But this is not the best option for everyone. If you can’t afford your loan payments, then consolidate them over 30 years with a fixed interest rate (make sure to pay more than the minimum if you can afford it).

This Is Sparta!!! (Kicks Student Loans in the Face)

If you are like me and you want to destroy your student loans, then follow these steps. If you simply can’t afford it, then move on to the next section.

If you can afford the minimum monthly payments under the 10 year plan, then go ahead. If you want to pay it off in a shorter period of time, then kudos. But deciding whether or not to consolidate is a huge factor.

The first thing you have to understand before consolidating is your average effective interest rate. If you have several outstanding loans, then chances are they all have varying interest rates. My loans range from 2% all the way up to 7% with an average effective interest rate around 5%. To calculate this, you simply make an excel spreadsheet with the following calculations:

1. Outstanding loan balance in column A
2. Interest rate (as a percentage) in column B
3. Multiply principal balance and interest rate in column C
4. Sum the total of column A and column C
5. Take the total of column C and divide it by the total of column A (This will get you your average interest rate)

When you go to consolidate your loans, you have to keep in mind your average effective interest rate. If your average effective interest rate is 3% but the loan consolidation is offering you a variable rate of 4.75% then don’t consolidate. If your average effective rate is 7% and they are offering you 4% then you should consolidate.

From there it’s simple, just pay your monthly payments and put as much money towards your payments as possible.

I’m Broke but I’ll Probably Make More Money In Time

If you don’t have enough money to pay your student loans then you can choose the income based repayment plan. This is great for people who want to pay more money as they make more money. So when you are broke you can pay a smaller amount. And when you’re a baller making a ton of money you’ll pay more. To opt into this program follow these steps:

1. Grab you prior year tax return, your mom and a bottle of Jack.
2. Click here.
3. The website says it should take ten minutes, but let’s be honest…

Follow the steps, send in the required information and pay your reduced monthly student loan payment.

I Want To Stick it To the Man

If you don’t want to pay back your student loans then there are some ways you can stick it to the man:

1. Pray for your school to shut down and watch your student loan balance go to zero (along with the credibility of your degree).
2. Work for the Government, Non-Profit or other 501(c)(3) for 10 years while making student loan payments (click here to learn more).
3. Work as a teacher for 5 consecutive school years in an underserved school district (Click here to learn more).
4. Total and permanent disability (I hope you wouldn’t do this on purpose but for more information click here).
5. Student loans can’t follow you in death, but life with student loans is better than no life without student loans (click here to learn more).
6. You really tried to pay your loans but you literally have no money or any possible way to make any payments whatsoever. It’s so bad that you have to decide whether you want to feed your children or pay your student loans. There is no foreseeable change in your circumstance for the duration of the repayment period and you filed for Chapter 7 or Chapter 13 bankruptcy. This gives you a remote possibility of discharging your debt but does not guarantee it. Student loans are the tattoos of debt (just another dumb mistake you made as a young adult that will be expensive to get rid of). To learn more click here.

Final Things to Consider

So I gave you most (if not all) of your options, which is a good first step towards paying off your loans. But before you make any decision you should ask yourself a set of questions:

1. Can I afford to pay my student loans? (If yes, pay them, if no, consider an alternative repayment option).
2. I can afford to pay my student loans, but do I want to go on at least one vacation in my 20s? (If you’re ok eating ramen and never leaving your hometown, then go for it, if not, then consider an alternative repayment option).
3. Do I want to work for an underserved school district, government agency or Non-Profit for the next 5 to 10 years? (If yes, then good for you! If no, then enjoy paying your student loans)

Before making a repayment plan, you want to look at your needs and your wants. Maybe you want to save up to move out of your parents’ basement, or maybe you want to live there forever. Knowing your circumstances is a crucial first step.

Don’t be afraid to chose a repayment option; you always have the opportunity to change your plan if unforeseen circumstances arise. If you lose your job, you can defer your loans or lower the payments for a short period of time. If you land that big job then you can always pay more than the minimum required monthly payments.

Most importantly, be realistic. As much as you’d like to pay off your loans in a year or two, you have to consider if it’s a realistic goal. Pay what you can afford and don’t sacrifice your 20’s for the sake of being debt free. Nobody on their death bed ever said, “Man I wish I didn’t spend that year in Europe with my wife because I could have paid off my student loans a few years earlier.”