The class of 2015 was on average the most indebted college class to date, averaging an astounding $35,000 per student.

With that amount of debt, it’ll take a student an average of ten years to pay off their loans. Yeah, you heard me. TEN YEARS. That’s a long time! However, it can be even longer if you’re not educated on the loans that you are taking and how to pay them back in a timely manner. Here’s a run-down of types of loans and tips on paying them back.

Types of Loans:

Stafford Loans: These loans are available to all students. They come in two flavors.

Subsidized Loans: These loans are for low-income students. They don’t accumulate interest because the federal government pays the interest while the student is attending college on at least a half-time basis and during other periods of authorized deferment.
Unsubsidized Loans: These loans accumulate interest as soon as a student receives the money. They are not based on financial need, and if the student doesn’t pay for the interest it is added to the loan balance.

Perkins Loans: These loans are for qualified low- income students. You have up until nine months after you graduate to begin repaying your loan.

PLUS Loans: These loans are for graduate students or for parents of students attending a university.

All of these loans have their own eligibility requirements and payment plans. These payment plans can be changed if the student is faced with financial hardship or other factors.

A Note About Private Loans

Families can always go to their bank to get a private loan for education. What you need to be wary of with private loans is the interest rates. Loans from the government often have lower interest rates, but not always. Compare your options and make your choice carefully.

Tips for Taking Out Loans

Fill Out the FAFSA on Time: The FAFSA (Free Application for Federal Student Aid) is something that every college student needs to fill out if they want to receive financial aid. The sooner you fill it out the more likely you are to receive the amount you need. FAFSA is now available on the first of October the year before you plan on attending and can be filled out with your current tax return.

Know What You’re Borrowing: Be wary of what type of loans you’re taking out, and what the stipulations are of those loans. Refer to the types of loans listed above.

Understand Interest Rates: Usually, student loans have pretty reasonable interest rates. However, remember to be mindful of how much interest is accumulating over the term of your payment plan.

Borrow as Much as you Need, Not More: Remember, this isn’t free money. All of the money you borrow now you will have to pay back, and then some. Don’t borrow more than what you need, and live beneath your means while living off of loans.

Tips for Paying it Back:

Get on That Interest: Students who take out $27,000 on average will pay back $10,285.87 in interest in a 10-year payment plan. However, a student who pays an extra $25 per month on top of their regular monthly payments will cut a year off their repayment time and save an extra $1,143. Not bad!

Student Loans Cannot be Erased Through Bankruptcy: Student loans are notoriously difficult to get away from. You will have to pay that money back no matter what your financial situation. You can adjust your payment plan if you have financial hardship, but the longer you have the loan the more interest you will be paying back in the long run.

Be on Time: You don’t want to pay extra money for late fees or more interest. So, be responsible and pay your bills in a timely manner. The best way to avoid being late is to set up automatic payments.

The Upside of Loans

If I haven’t scared you off yet, I want to tell you the good part about student loans. They allow you to enjoy a once in a lifetime college experience, and that is priceless.

Most students are able to completely pay off their loans within ten years without it cramping their lifestyle too much. Understanding what you're getting into ahead of time and being responsible with your money helps. Be aware of your loans and their stipulations, your interest, and make your payments. If you do all this, you can enjoy the college experience and eventually be debt free.