5 student loan debt mistakes to avoid in your 20s

But, if your debt isn't included in the $5 billion in student loan debt that may be thrown out due to shoddy paperwork practices, you'll likely have to bite the bullet and pay it off.

While you're paying off your debt, it's important to steer clear of common pitfalls that could make your life harder.

Here are some mistakes to avoid when it comes to paying back your student loan debt:

1. You wait until the end of the grace period to begin making payments

You'll likely receive a grace period of six months after graduation before you have to start paying back your debt.

Sounds good, right?

Wrong. The grace period is kind of a trap.

"Most student loans begin accruing interest the moment you graduate, and that interest adds up," Anna Khayet, head of product marketing for student loan refi at online lending website SoFi, tells Business Insider. "Any payments you can make sooner helps cut down on the capitalizing interest."

2. You forget about auto pay

"Automatic payments will deduct the amount directly from your checking account, ensuring you don't incur late fees," Khayet says. "And if you set up auto pay on your monthly loan payments, most loan providers will likely give you a 0.25% rate discount."

3. You dont strategize

If you have multiple student loans with very different interest rates, the way you pay them off can make a difference in how much interest you pay in the long run.

So it's important to strategize.

"If you make the largest of your payments on the loans with the highest interest rates, and pay just the monthly minimum payments on the rest of your loans, then you'll make the biggest dent in what you owe and save the most on the accruing interest," she says. "Remember that there are no pre-payment penalties for paying off a loan early on federal loans or on most private loans."

4. You dont consolidate federal loans and refinance private loans

If the monthly payments are truly too much for your budget, Khayet recommends looking into whether you're eligible for an income-based repayment plan. Also, consider consolidating federal loans into a federal direct consolidation loan and refinancing private loans.

"Consolidating both federal and private loans into one private loan can also be an option, but you would then lose some of the protections that come with federal loans," she says. "Instead, consider refinancing private loans at a lower interest rate, which doesn't just simplify the payment process but also saves you money."

5. You dont properly prioritize your student loan debt

Khayet says that young people should first and foremost prioritize their organization's 401(k) match program, to scoop up "free money."

Next, it's important to set up an emergency fund that can cover living expenses for at least three months.

After that, your student loan debt should be your next financial priority.

"Although most of us think we'll pay off student loans in 10 years, many Americans end up taking 20 years to pay off their loans, well into their 40s or 50s," she says. "You should prioritize paying off student debt before making other large investments in order to get the most bang for your buck."