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8 Common Student Loan Mistakes
1) Not figuring out how much you’ll need to pay each month
As you’re trying to plan your life after graduation, it’s important that you know how much you’ll need to pay each month toward your student loans so you can budget your other expenses accordingly. To estimate what you’ll need to pay based on your income and loan debt, use the repayment estimator.
2) Choosing the wrong repayment plan
The repayment plan you choose is a major factor in determining how much your monthly student loan payment will be and how long it will take you to pay back your loans. The Department of Education offers several different repayment plans. To compare these plans based on your student loan debt and income, use the repayment estimator.
Make sure you’re enrolled in a plan that you can afford. If you’re struggling to make your monthly payment, consider switching to an income-driven repayment plan, such as our “Income-Based” or “Pay As You Earn” plans. If you have questions, need advice, or would like to switch your repayment plan, contact your loan servicer.
3) Not paying extra when you can
If you are paying interest on your federal student loan, that interest accrues each day. An easy way to save money on your student loans is to pay more than what’s required whenever you can. Here are some ideas:
- Make interest payments while you’re still in school and/or during your grace period
- Use your tax refund to make an additional loan payment
- Tack a few extra dollars onto your payment each month
4) Missing payments
If you’re feeling overwhelmed or don’t think you’ll be able to afford your next student loan payment, don’t just stop paying. Instead, contact your loan servicer as soon as possible. Not making your student loan payments is a big deal. It can result in default, which negatively impacts your credit score, and may affect your ability to borrow for things like a car or a home. Your loan servicer can recommend options to reduce or postpone your payment and keep your loan in good standing.
5) Paying for student loan help
There are countless ads online from companies offering to help you manage your student loan debt…for a fee, of course. But, did you know that you can get help with your student loans for free? The U.S. Department of Education provides FREE student loan help through our servicers.
Your loan servicer is the company hired by the U.S. Department of Education to help you manage, understand, and pay back your loans. They are there to help guide you through the loan repayment process, answering any questions you have along the way.
- Struggling to make your student loan payments? They can help you apply for an income-driven repayment plan or help you research options to postpone payments.
- Interested in student loan forgiveness? They have all the info you need.
- Want to consolidate your student loans? They can help with that.
Their services are provided free of charge, but they can only help you if they can reach you. Graduating and moving away from campus? Changing your cell phone number or e-mail address? Make sure you let your loan servicer know.
Nicole Callahan is a digital engagement strategist at the U.S. Department of Education’s office of Federal Student Aid.