Advisors offer advice to recent graduates on student loan repayment

Congratulations to families with graduating college seniors. Savor all those wonderful memories because the bill is coming soon, and not just for the post-processional meal.

Financial advisors have plenty of advice when it comes to approaching student loan payments. And for recent graduates and their families, it’s worth taking notes.

Shinaola Atoro, senior wealth advisor at Mission Wealth, for one, advises families to plan early by evaluating repayment options, including income-driven plans, and reviewing whether employers offer student loan assistance. He also looks at opportunities such as using 529 plan balances or family gifting strategies, within tax guidelines, to support repayment. 

“We want a plan in place before that first payment hits. With the right structure, families can take advantage of available resources while staying aligned with their financial goals,” Atoro said.

Atoro believes that new graduates should start by covering essential living expenses and making at least the minimum loan payments. From there, building an emergency fund is critical, beginning with a smaller cushion of $500 to $1,000 and working toward three to six months of expenses over time.

“Once that foundation is in place, I recommend contributing enough to their employer plans to capture any employer match, as that’s essentially free money. Balancing these priorities is what creates stability early on,” Atoro said.

Meanwhile, Michael Pumphrey, wealth advisor at Tanglewood Total Wealth Management, says the first step is to assess their student loan situation, including types, interest rates, and repayment plan options. They also should consider whether they qualify for forbearance based on their circumstances or any programs for loan forgiveness often associated with certain types of employment and public service.

“Once they have an understanding of their current situation, then they can establish a plan going forward, taking into consideration their income and other goals,” Pumphrey said.

Pumphrey adds that it is also wise to prioritize certain goals over loan repayment beyond the minimums like building an emergency fund, contributing to your employer retirement plan to receive their match, and paying off high interest consumer debt like credit cards. After these high impact goals have been reached then the focus can be shifted towards accelerating student loan payoff.

“Ultimately, I believe it's important to have a balanced approach and to not ignore any one goal, otherwise it can feel like you aren’t making progress in some areas. Also as income goes up over time, you will have increased capacity to get more intentional without sacrificing in other parts of your life,” Pumphrey said.

Elsewhere, Michael Green, wealth management advisor at Apollon Wealth, points out that recent graduates face a different student loan landscape than even a few years ago, and his advice has evolved accordingly. Instead of pushing for aggressive repayment at all costs, he’s guiding clients to find a more balanced, strategic approach that fits within their broader financial lives.

“The starting point is always stability. New grads need to make sure they can comfortably cover basic living expenses and build an emergency cushion before accelerating loan payments. From there, we encourage them to capture any employer retirement match and begin investing early—because missing out on years of compounding can be more costly than carrying low-rate debt,” Green said.

SENSIBLE REPAYMENT STRATEGIES

Mission Wealth’s Atoro often recommends the avalanche method for repaying student debt, which prioritizes paying down higher-interest loans first to reduce total borrowing costs over time. At the same time, he says it’s important to evaluate the differences between federal and private loans, particularly around flexibility, protections, and forgiveness opportunities like Public Service Loan Forgiveness.

“While the math typically supports this approach, personal preference also plays a role. Some need an early win to stay on track, so we adjust the plan accordingly,” Atoro said.

According to Tanglewood’s Pumphrey, there is no “one size fits all approach” to student loan repayments as everyone’s personal financial situation is different along with varying debt structure and repayment options. As a result, he directs students and families to the resources available on studentaid.gov as well as to seek the advice of a financial aid counselor at their school as they approach graduating. Once out of school, he says Accredited Financial Counselors and Certified Student Loan Professionals are well versed in these areas to help provide ongoing advice.

Finally, Apollon Wealth’s Green believes that when it comes to repayment strategy, flexibility is key. He recommends most borrowers, especially those with federal loans, enroll in one of the income-based repayment plans and then make additional payments opportunistically as income grows. In his view, this “pay extra when you can” approach allows clients to reduce debt over time without sacrificing liquidity or other financial priorities. Ultimately, student loans shouldn’t be managed in isolation, according to Green.

“We’re helping clients think about balancing competing priorities like debt alongside saving, investing, and career decisions—because the goal isn’t just to eliminate loans, it’s to build long-term financial security without delaying major life milestones along the way,” Green said.