5 Ways to Pay Off Your Student Loans Faster

11.10-5-Ways-to-Pay-Off-Your-Student-Loans-Faster

The first thing people say when they find out where I work: “Can you delete my student loans for me?”

If only I had that power. Just like many of you, I am a student loan borrower. Each month, my federal student loan servicer, withdraws my $381.35 student loan payment from my bank account and I still cringe every time. (Do you know how many trips I could take with that money?) Point is, I understand what you’re going through.

That said, there are manageable ways to pay off your student loans faster than you had planned and save yourself money by doing so!

Here are some ideas:

1) Pay Right Away Even though you’re usually not required to, consider making student loan payments during your grace period or while you’re still in school. If you’re short on cash, consider at least paying enough each month to cover the amount of interest you’re accruing. That way your interest doesn’t capitalize and get added to your principal balance. Not doing this was one of the biggest mistakes I made with my student loans.

2) Sign up for Automatic Debit If you sign up for automatic debit, your student loan servicer will automatically deduct your student loan payment from your bank account each month. Not only does this help ensure that you make payments on time, but you may also be able to get an interest rate deduction for enrolling. Contact your loan servicer to see if your loan is eligible for this benefit.

3) Pay More than Your Minimum Payment Even if it’s $5 a month!  Paying a little extraeach month can reduce the interest you pay and reduce your total cost of your loan over time. (Pay attention! This next part is important!) If you want to ensure that your loan is paid off faster, make sure you tell your loan servicer that the extra amount you’re paying is not intended to be put toward future payments. If given the option, ask your servicer if the additional payment amount can be allocated to your higher interest loans first.

4) Use Your Tax Refund One easy way to pay off your loan faster is to dedicate your tax refund to paying off some of your student loan debt. Part of the reason you may have gotten a refund in the first place is because you get a tax deduction for paying student loan interest. Might as well be smart about the way you spend it.

5) Seek Out Forgiveness and Repayment Options There are a number of situations under which you can have your federal student loan balance forgiven. There are forgiveness and repayment programs for teachers, public servants, members of the United States Armed Forces, and more. Most of these programs have very specific eligibility requirements, but if you think you might qualify, you should definitely do some research. Also, research whether your employer offers repayment assistance for employees with student loans. There are many who do!

Nicole Callahan is a Digital Engagement Strategist at The U.S. Department of Education’s office of Federal Student Aid. She is scheduled to finish repaying her student loans in 2021, but is hoping that by taking her own advice, she will finish much faster.

How to Decide Which Income-Driven Repayment Plan to Choose

If your student loan payments are high compared to your income, you may be eligible to switch your repayment plan to one that calculates your monthly payment based on your income and family size.

TIP: If you are seeking Public Service Loan Forgiveness, you should repay your federal student loans under an income-driven repayment plan.

If you need to make lower monthly payments, one of the three following income-driven plans may be right for you:

  • Income-Based Repayment Plan (IBR)
  • Pay As You Earn Repayment Plan (PAYE)
  • Income-Contingent Repayment Plan (ICR)

What’s the difference between the three plans?

While there are other minor differences between these three repayment plans, these are four significant ways they differ:

You can compare the high-level differences below:

IDR-Chart-Final

It’s also important to note that your loan types must also be eligible to be repaid under an income-driven plan.

How do I decide which income-driven repayment plan to choose?

1) See which plans you qualify for. Not everyone qualifies for an income-driven repayment plan. You can use our Repayment Estimator to estimate your payment amount for all repayment plans, including income-driven plans.

    • Check and see whether the types of federal student loans you have are eligible. In some cases, you may need to consolidate your student loans in order to be able to repay the loan(s) under an income-driven plan or the income-driven repayment plan that offers the lowest monthly payment.
    • If you’re considering our IBR or PAYE, you’ll need to make sure you meet the debt-to-income ratio requirement. To qualify, the payment that you would be required to make under the IBR or PAYE (based on your income and family size) must be less than what you would pay under the Standard Repayment Plan with a 10-year repayment period. Generally, you will meet this requirement if your federal student loan debt is higher than your annual discretionary income or represents a significant portion of your annual income.

2) Compare Plans Based on YOUR Circumstances. Using our repayment estimator, you can estimate your monthly payment amount, repayment period, projected loan forgiveness, and the total interest you’ll pay over the life of your loan. Just log in using your Federal Student Aid PIN, enter basic information about your income, family size, tax filing status, and state of residence and out pops a comparison based on your individual circumstances. You can also view the comparison in graph format!

10.10-repayment-estimator-screenshot

3) Weigh the Pros and Cons. Income-driven repayment plans may lower your federal student loan payments. However, whenever you make lower payments or extend your repayment period, you will likely pay more in interest over time—sometimes significantly more. In addition, under current Internal Revenue Service (IRS) rules, you may be required to pay income tax on any amount that is forgiven if you still have a remaining balance at the end of your repayment period.

Before you apply for an income-driven repayment plan, contact your loan servicer with any questions. Your loan servicer will help you decide whether one of these plans is right for you.

I’ve decided which income-driven plan is right for me. How do I apply?

If you decide that an income-driven repayment plan is right for you, there are a few steps you need to take. To apply, you must submit an application called the Income-Driven Repayment Plan Request. You can submit the application online at StudentLoans.gov or on a paper form, which you can obtain from your loan servicer. Along with the application, you’ll need to provide income information. Find out more information about the documentation you must provide.

FACT: The application allows you to select an income-driven repayment plan by name, or request that your loan servicer determine what income-driven plan or plans you qualify for, and to place you on the income-driven plan with the lowest monthly payment amount.

Is there anything else I should know about choosing an income-driven repayment plan?

      • You must provide updated documentation each year You must provide your loan servicer with updated income documentation and certify your family size on the Income-Driven Repayment Plan Request each year, generally around the same time of the year that you first began repayment under the income-driven plan that you selected. It’s important for you to provide the required information by the annual deadline specified by your loan servicer. If you miss the deadline, you’ll remain on the same income-driven repayment plan, but your monthly payment will no longer based on your income (this means your payment will increase).
      • Your payment amount can change from year to year. Your required monthly payment amount may increase or decrease if your income or family size changes from year to year.

Nicole Callahan is a digital engagement strategist at the Department of Education’s office of Federal Student Aid.

Avoid These 4 Mistakes I Made With My Student Loans

10.3-4-mistakes

It’s been tough for me to come to terms with, but, unfortunately for me, I am not in college anymore. In fact, this spring marked three years since I graduated from college and went into repayment on my student loans. I know, not the most exciting thing in the world, but important. So while I don’t claim to be a student loan expert, I have learned a lot of lessons along the way, mostly through trial and error. In hopes that you won’t make the same mistakes I did, here are some things I wish I had known when I was graduating and getting ready to start repaying my student loans:

1. I should have kept track of what I was borrowing

Let’s be real. When you take out student loans to help pay for college, it’s easy to forget that the money will eventually have to be paid back … with interest. The money just doesn’t seem real when you’re in college, and I didn’t do a good job of keeping track of what I was borrowing and how it was building up. When it was time to start repaying my loans, I was quite overwhelmed. I had different types of loans and different interest rates. When I did eventually see my loan balance, I was pretty shocked.

You can avoid this problem. Had I known there was a super easy way to keep track of how much I’d borrowed in federal student loans, I would have been much better off. You can view all your federal student loans in one place by going to StudentAid.gov/login.

2. I should have made interest payments while I was still in school

If you’re anything like me, you probably consumed your fair share of instant noodles while trying to survive on a college student’s budget. Trust me, I get it. But one thing I really regret when it comes to my student loans was not paying interest while I was in school or during my grace period. Like I said, I was far from rich, but when I was in college, I did have a work-study job and waited tables on the side. I probably could have spared a few dollars each month to pay down some student loan interest. Remember, student loans are borrowed money that you have to repay with interest and more importantly, that interest may capitalize, or be added to your total balance. My advice: Even though you don’t have to, do yourself a favor and consider paying at least some of your student loan interest while you’re in school. It will save you money in the long run.

3. I should have kept my loan servicer in the loop

If you’re getting ready to graduate or have graduated recently and haven’t heard from your loan servicer, make sure you check that your loan servicer has up-to-date contact info for you. When I graduated and moved into my first big-girl apartment, I forgot to change my address with my loan servicer. I found out that all of my student loan correspondence was going to my mom’s address. I hadn’t even thought to update my loan servicer with my new contact information. Don’t make the same mistake I did. Keep your servicer informed of address, email, and phone changes.

4. I should have figured out what my monthly loan payments were going to be BEFORE I went into repayment

By the time my grace period was over, I had a decent idea of how much I had borrowed in total, but I had no idea what my monthly payments would be. I thought I was fine. I had started my new job and been paying rent and other bills for about six months. Then my grace period ended, and I got my first bill from my loan servicer. It was definitely an expense I hadn’t fully taken into account.

Don’t make the same mistake. Federal Student Aid has an awesome repayment estimator that allows you to pull in your federal student loan information and compare what your monthly payments would be under the different repayment plans that are offered. That way, you can choose the right repayment plan, know how much you can expect to pay monthly, and budget accordingly … unlike me.

I’ll be the first to admit that this whole process can be a little overwhelming, especially when you’re new at it. But just remember, your loan servicer is there to help you. If you need advice or have questions about your student loans, don’t hesitate to contact your loan servicer. Their assistance is FREE!

Nicole Callahan is a digital engagement strategist at the Department of Education’s office of Federal Student Aid.

6 Things You MUST Know About Repaying Your Student Loans

When it comes to repaying your federal student loans, there’s a lot to consider. By taking the time to understand the details of repayment, you can save yourself time and money.

REMEMBER: You never have to pay for help with your federal student loans. If you have any questions at all, contact your servicer. They provide FREE help.

This should help you get started.

When do I begin repaying my federal student loans?

You don’t have to begin repaying most federal student loans until after you leave college or drop below half-time enrollment. Many federal student loans will even have a grace period. The grace period gives you time to get financially settled and to select your repayment plan. Note that for most loans, interest will accrue during your grace period.

Your loan servicer or lender will provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment.

Whom do I pay?

You will make your federal student loan payments to your loan servicer*, not the U.S. Department of Education (ED) directly. ED uses several loan servicers to handle the billing and other services on federal student loans. Your loan servicer can work with you to choose a repayment plan and can answer any questions you have about your federal student loans. It’s important to maintain contact with your loan servicer and keep your servicer informed of any changes to your mailing address, e-mail, or phone number so they know where to send correspondence and how to contact you. How much do I need to pay?

Your bill will tell you how much to pay. Your payment (usually made monthly) depends on

  • the type of loan you received,
  • how much money you borrowed,
  • the interest rate on your loan, and
  • the repayment plan you choose.

You can use our repayment estimator to estimate your monthly payments under different repayment plans to determine which option is right for you. Just remember, if you would like to switch repayment plans, you must contact your loan servicer.

How do I make my student loan payments?

There are several ways you can submit payments to your loan servicer, including options to submit your payment online through your loan servicer’s website.

TIP: Your servicer may offer the option to have your payments automatically withdrawn from your bank account each month. You may want to consider this option so you don’t forget to make your payments.

What should I do if I’m having trouble making my student loan payments?

Contact your loan servicer as soon as possible. You may be able to change your repayment plan to one that will allow you to have a longer repayment period or to one that is based on your income. If switching repayment plans isn’t a good option for you, ask your loan servicer about your options for loan consolidation or a deferment or forbearance.

Note: Several third-party companies offer student loan assistance for a fee. Most of these services can be obtained for free from your loan servicer.

What happens if I don’t make my payments?

Not making your student loan payments can result in default, which negatively impacts your credit score. This may affect your ability to borrow for things like buying a car or purchasing a home. Your tax refunds may also be withheld and applied to your outstanding student loan debt. There is never a reason to default. The Department of Education offers several options to ensure that you can successfully manage your student loans. If you’re feeling overwhelmed or having difficulty making payments, contact your loan servicer for help.

*If you are repaying federal student loans made by a private lender (before July 1, 2010), you may be required to make payments directly to that lender.

Nicole Callahan is a digital engagement analyst at the Department of Education’s office of Federal Student Aid.

4 Things You Should Do Before Repaying Your Student Loans

9.29-4-Must-DOs

One perk of having a federal student loan instead of a private student loan is that you are not required to start making payments right away. In fact, many federal student loans have a grace period*, or a set amount of time after you graduate, leave school, or drop below half-time enrollment before you must begin repaying your student loans. For most student loans, the grace period is 6 months but in some instances, the grace period could be longer. The grace period gives you time to get financially settled and to select your repayment plan.

For those of you who graduated in the spring, you’re probably nearing the end of your grace period. Your loan servicer, a company that works on behalf of the U.S. Department of Education to process and manage student loan payments, has probably contacted you letting you know how the repayment process will work and when your first payment is due.

Here are four things you should do now, before you make that first student loan payment:

  1. Get Organized

Start by tracking down all of your student loans. Did you know that you can view all your federal student loans in one place?

Just log into StudentAid.gov/login using your Federal Student Aid PIN to view your loan balances, interest rate, loan servicer contact information, and more.

Note: Don’t forget to check your personal records to see if you have private student loans.

  1. Contact Your Loan Servicer

Your loan servicer is the company that will be collecting payments on your federal student loan on behalf of the U.S. Department of Education. They are also there to provide support. Your loan servicer can help you choose a repayment plan, understand loan consolidation, and complete other tasks related to your federal student loan, so it’s important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.

To find out who your loan servicer is, log in to StudentAid.gov. You may have more than one loan servicer, so it is important that you look at each loan individually.

  1. Estimate Your Monthly Payments Under Different Repayment Plans

Federal Student Aid has a great repayment calculator that allows you to compare our different repayment plan options side by side. Once you log in, the calculator pulls in information about your federal student loans, such as your loan balance and your interest rates, and allows you to estimate what your monthly payment would be under each of our different repayment plans. It also allows you to compare the total amount you will pay for your loan over time and can tell you the amount of loan forgiveness you’re expected to qualify for if you choose one of our income-driven repayment plans. Try it!

  1. Select the Repayment Plan That Works for You

One of the greatest benefits of federal student loans is the flexible repayment options. Take advantage of them! Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any time. There are options to tie your monthly payments to your income and even ways you can have your loans forgiven if you are a teacher or employed in certain public service jobs. Once you have determined which repayment plan is right for you, you must contact your loan servicer to officially change your repayment plan.

* Not all federal student loans have a grace period. Note that for many loans, interest will accrue during your grace period.

Nicole Callahan is a digital engagement analyst at the Department of Education’s office of Federal Student Aid.

5 Ways to Pay Off Your Student Loans Faster

PayOffYourStudentLoansFaster

The first thing people say when they find out where I work: “Can you delete my student loans for me?”

If only I had that power. Just like many of you, I am a student loan borrower. Each month, my federal student loan servicer, withdraws my $381.35 student loan payment from my bank account and I still cringe every time. (Do you know how many pairs of shoes I could buy with that money?) Point is, I understand what you’re going through.

That said, there are manageable ways to pay off your student loans faster than you had planned and save yourself money by doing so!

Here are some ideas:

  1. Pay Right Away Even though you’re usually not required to, consider making student loan payments during your grace period or while you’re still in school. If you’re short on cash, consider at least paying enough each month to cover the amount of interest you’re accruing. That way your interest doesn’t capitalize and get added to your principal balance. Not doing this was one of the biggest mistakes I made with my student loans.
  2. Sign up for Automatic Debit If you sign up for automatic debit, your student loan servicer will automatically deduct your student loan payment from your bank account each month. Not only does this help ensure that you make payments on time, but you may also be able to get an interest rate deduction for enrolling. Contact your loan servicer to see if your loan is eligible for this benefit.
  3. Pay More than Your Minimum Payment Even if it’s $5 a month!  Paying a little extra each month can reduce the interest you pay and reduce your total cost of your loan over time. If you want to ensure that your loan is paid off faster, make sure you tell your loan servicer that the extra amount you’re paying is not intended to be put toward future payments. If given the option, ask your servicer if the additional payment amount can be allocated to your higher interest loans first.
  4. Use Your Tax Refund One easy way to pay off your loan faster is to dedicate your tax refund to paying off some of your student loan debt. Part of the reason you may have gotten a refund in the first place is because you get a tax deduction for paying student loan interest. Might as well be smart about the way you spend it.
  5. Seek Out Forgiveness and Repayment Options There are a number of situations under which you can have your federal student loan balance forgiven. There are forgiveness and repayment programs for teachers, public servants, members of the United States Armed Forces, and more. Most of these programs have very specific eligibility requirements, but if you think you might qualify, you should definitely do some research. Also, research whether your employer offers repayment assistance for employees with student loans. There are many who do!

Nicole Callahan is a Digital Engagement Strategist at The U.S. Department of Education’s office of Federal Student Aid. She is scheduled to finish repaying her student loans in 2021, but is hoping that by taking her own advice, she will finish much faster.

 

4 Things to Do Before Making Your First Student Loan Payment

4.28 4 Things to Do Before

One perk of having a federal student loan instead of a private student loan is that you are not required to start making payments right away. In fact, many federal student loans have a grace period*, or a set amount of time after you graduate, leave school, or drop below half-time enrollment before you must begin repaying your student loans. For most student loans, the grace period is 6 months but in some instances, the grace period could be longer. The grace period gives you time to get financially settled and to select your repayment plan.

For those of you who are getting ready to graduate, your grace period is about to begin. You’ll be contacted by your loan servicer, a company that works on behalf of the U.S. Department of Education to process and manage student loan payments, letting you know how the repayment process will work.

In the meantime, here are four things you should do now, before your first student loan payment is due:

1. Get Organized

Start by tracking down all of your student loans. Did you know that there is a website that allows you to view all your federal student loans in one place?

You can log into www.nslds.ed.gov using your Federal Student Aid PIN to view your loan balances, information about your loan servicer(s), and more.

Note: Don’t forget to check your personal records to see if you have private student loans.

2. Contact Your Loan Servicer

Your loan servicer is the company that will be collecting payments on your federal student loan on behalf of the U.S. Department of Education. They are also there to provide support. Your loan servicer can help you choose a repayment plan, understand loan consolidation, and complete other tasks related to your federal student loan, so it’s important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.

To find out who your loan servicer is, visit www.nslds.ed.gov. You may have more than one loan servicer, so it is important that you look at each loan individually.

3. Estimate Your Monthly Payments Under Different Repayment Plans

Federal Student Aid has a great Repayment Estimator tool that allows you to compare our different repayment plan options side by side. Once you log in, the repayment estimator pulls in information about your federal student loans, such as your loan balance and your interest rates, and allows you to estimate what your monthly payment would be under each of our different repayment plans. It also allows you to compare the total amount you will pay for your loan over time depending on the repayment option you choose. Try it!

4. Select the Repayment Plan That Works for You

One of the greatest benefits of federal student loans is the flexible repayment options. Take advantage of them! Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any time. There are options to tie your monthly payments to your income and even ways you can have your loans forgiven if you are a teacher or employed in certain public service jobs. Once you have determined which repayment plan is right for you, you must contact your loan servicer to officially change your repayment plan.

* Not all federal student loans have a grace period. Note that for many loans, interest will accrue during your grace period.

Nicole Callahan is a digital engagement analyst at the Department of Education’s office of Federal Student Aid.

4 Mistakes I Made With My Student Loans and How You Can Avoid Them

mistakes_image

It’s been tough for me to come to terms with, but, unfortunately for me, I am not in college anymore. In fact, this spring marks three years since I graduated from college and went into repayment on my student loans. I know, not the most exciting thing in the world, but important. So while I don’t claim to be a student loan expert, I have learned a lot of lessons along the way, mostly through trial and error. In hopes that you won’t make the same mistakes I did, here are some things I wish I had known when I was graduating and getting ready to start repaying my student loans:

  1. I should have kept track of what I was borrowing

Let’s be real. When you take out student loans to help pay for college, it’s easy to forget that the money will eventually have to be paid back … with interest. The money just doesn’t seem real when you’re in college, and I didn’t do a good job of keeping track of what I was borrowing and how it was building up. When it was time to start repaying my loans, I was quite overwhelmed. I had different types of loans and different interest rates. When I did eventually see my loan balance, I was pretty shocked.

You can avoid this problem. Had I known there was a super easy way to keep track of how much I’d borrowed in federal student loans, I would have been much better off. Just go to www.nslds.ed.gov, select “Financial Aid Review,” log in, and you can view all of your federal student loans in one place! How did I miss that?

  1. I should have made interest payments while I was still in school

If you’re anything like me, you probably consumed your fair share of instant noodles while trying to survive on a college student’s budget. Trust me, I get it. But one thing I really regret when it comes to my student loans was not paying interest while I was in school or during my grace period. Like I said, I was far from rich, but when I was in college, I did have a work-study job and waited tables on the side. I probably could have spared a few dollars each month to pay down some student loan interest. Remember, student loans are borrowed money that you have to repay with interest and more importantly, that interest may capitalize, or be added to your total balance. My advice: Even though you don’t have to, do yourself a favor and consider paying at least some of your student loan interest while you’re in school. It will save you money in the long run.

  1. I should have kept my loan servicer in the loop

If you’re getting ready to graduate or have graduated recently and haven’t heard from your loan servicer, make sure you check that your loan servicer has up-to-date contact info for you. When I graduated and moved into my first big-girl apartment, I forgot to change my address with my loan servicer. I found out that all of my student loan correspondence was going to my mom’s address. I hadn’t even thought to update my loan servicer with my new contact information. Don’t make the same mistake I did. Keep your servicer informed of address, email, and phone changes.

  1. I should have figured out what my monthly loan payments were going to be BEFORE I went into repayment

By the time my grace period was over, I had a decent idea of how much I had borrowed in total, but I had no idea what my monthly payments would be. I thought I was fine. I had started my new job and been paying rent and other bills for about six months. Then my grace period ended, and I got my first bill from my loan servicer. It was definitely an expense I hadn’t fully taken into account.

Don’t make the same mistake. Federal Student Aid has an awesome repayment estimator that allows you to pull in your federal student loan information and compare what your monthly payments would be under the different repayment plans that are offered. That way, you can choose the right repayment plan for you, know how much you can expect to pay monthly, and budget accordingly … unlike me.

I’ll be the first to admit that this whole process can be a little overwhelming, especially when you’re new at it. But just remember, your loan servicer is there to help you. If you have questions or need advice, don’t hesitate to contact them.

Nicole Callahan is a digital engagement strategist at the Department of Education’s office of Federal Student Aid.

6 Things You Must Know About Repaying Your Student Loans

When it comes to repaying your federal student loans, there’s a lot to consider. But, by taking the time to understand the details of repayment, you can save yourself time and money. This should help you get started.

When do I begin repaying my federal student loans?

You don’t have to begin repaying most federal student loans until after you leave college or drop below half-time enrollment. Many federal student loans will even have a grace period. The grace period gives you time to get financially settled and to select your repayment plan. Note that for most loans, interest will accrue during your grace period.

Your loan servicer or lender will provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment.

Whom do I pay?

You will make your federal student loan payments to your loan servicer*, not the U.S. Department of Education directly. The Department uses several loan servicers to handle the billing and other services on federal student loans. Your loan servicer can work with you to choose a repayment plan and can answer any questions you have about your federal student loans. It’s important to maintain contact with your loan servicer and keep your servicer informed of any changes to your address, e-mail, or phone number so they know where to send correspondence and how to contact you.

How much do I need to pay?

Your bill will tell you how much to pay. Your payment (usually made monthly) depends on

  • the type of loan you received,
  • how much money you borrowed,
  • the interest rate on your loan, and
  • the repayment plan you choose.

You can use our repayment estimator to estimate your monthly payments under different repayment plans to determine which option is right for you. Just remember, if you would like to switch repayment plans, you must contact your loan servicer.

How do I make my student loan payments?

There are several ways you can submit payments to your loan servicer, including options to submit your payment online through your loan servicer’s website.

TIP: Your servicer may offer the option to have your payments automatically withdrawn from your bank account each month. You may want to consider this option so you don’t forget to make your payments.

What should I do if I’m having trouble making my student loan payments?

Contact your loan servicer as soon as possible. You may be able to change your repayment plan to one that will allow you to have a longer repayment period or to one that is based on your income. Also, ask your loan servicer about your options for a deferment or forbearance or loan consolidation.

Note: Several third-party companies offer student loan assistance for a fee. Most of these services can be obtained for free from your loan servicer.

What happens if I don’t make my payments?

Not making your student loan payments can result in default, which negatively impacts your credit score. This may affect your ability to borrow for things like buying a car or purchasing a home. Your tax refunds may also be withheld and applied to your outstanding student loan debt. There is never a reason to default. The Department of Education offers several options to ensure that you can successfully manage your student loans. If you’re feeling overwhelmed or having difficulty making payments, contact your loan servicer for help.

*If you are repaying federal student loans made by a private lender (before July 1, 2010), you may be required to make payments directly to that lender. 

Nicole Callahan is a digital engagement strategist at the Department of Education’s office of Federal Student Aid

7 Ways to Promote FAFSA Completion at Your School

It’s FAFSA season! If you’d like to help us spread the word about the importance of completing the FAFSA, we have some great plug and play resources available at FinancialAidToolkit.ed.gov. Here are some ways you can use those resources to promote FAFSA completion at your high school or on your college campus:

  1. Host a FAFSA Night

Even though the FAFSA is simpler and faster to complete than ever, many students just prefer that someone walk them through it. To ease their anxiety, consider hosting a FAFSA completion night at your school. Contact local college financial aid offices, your state’s higher education department, TRIO programs, or local college access organizations to see if they have staff willing to volunteer and help out. When it comes time to start planning your event, we have lots of resources available to help you host a FAFSA Completion Workshop.

  1. Classroom Visits

Contact teachers and professors to see if you can do a quick FAFSA presentation at the beginning or end of class to remind students that it is time to fill out their FAFSAs. We even have videos and handouts that you can bring along with you!

  1. Write Articles and Emails

Do you have access to a list of student emails? How about writing an editorial for the school newspaper? If you don’t have the time or knowledge to write informational content about financial aid, we can help. We have provided sample articles and e-mails as well as some FAFSA related blog posts that you can use! Simply copy and paste; we’re giving you permission!

  1. Signage

Whether you’re working with a corkboard or digital monitors, we have some great visual content for you to use. How about printing some of our infographics and posting them around your school? Or displaying one of our YouTube videos on the monitors around campus? You could also change the desktop wallpapers on school computers to remind students to complete their FAFSAs. These are just a few ideas. Find all of our resources here.

  1. Use Social Media

Does your school have a presence on social media? We’ve put together a list of social media resources you can use to promote FAFSA completion. It includes 25 Tweets and 25 Facebook posts, as well as a list of FAFSA related videos, infographics, and blog posts. If you’re looking for even more content, feel free to use or repost anything Federal Student Aid has posted on our social media accounts. That’s what the content is there for, so don’t be shy.

  1. Reach Out to Influencers

One of the most trustworthy forms of promotion is word of mouth. Who are the people that the students at your school trust and listen to most? Teachers, professors, student leaders, coaches, parents, and peers are just some examples. One of the most powerful things you can do to promote FAFSA completion is to reach out to these influencers and give them the knowledge and resources they need to help you spread the word about FAFSA completion.

  1. Be Creative

FinancialAidToolkit.ed.gov has a number of resources available to help you promote FAFSA completion, but how can you take it to the next level? We’ve seen some awesome examples where schools have customized our videos, infographics and social media content to be specific to their school’s requirements and policies. We’ve also seen schools create some awesome visual resources of their own. When promoting FAFSA completion, we challenge you to think outside of the box. Just don’t forget to share your successes with us! We’d love to “borrow” your ideas.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

7 Common FAFSA Mistakes

FAFSA help

1.      Not Completing the FAFSA

I hear all kinds of reasons: “The FAFSA is too hard,” “It takes to long to complete,” I never qualify anyway, so why does it matter.” It does matter. By not completing the FAFSA you are missing out on the opportunity to qualify for what could be thousands of dollars to help you pay for college. The FAFSA takes most people 23 minutes to complete, and there is help provided throughout the application. Oh, and contrary to popular belief, there is no income cut-off when it comes to federal student aid

2.      Not Being Prepared

The online FAFSA has gotten a lot easier over the last few years. We’ve added skip logic, so you only see questions that are applicable to you. There is also an option to import your tax information from the IRS directly into the FAFSA application. But, the key to making the FAFSA simple is being prepared. You’ll save yourself a lot of time by gathering everything you need to complete the FAFSA before you start the application

3.      Not Reading Carefully

You’re on winter break and probably enjoying a vacation from reading for a couple weeks. I get it. But when it comes to completing the FAFSA, you want to read each question carefully. Too many students see delays in their financial aid for simple mistakes that could have been easily avoided.

Don’t rush through these questions:

  • Your Number of Family Members (Household size): The FAFSA has a specific definition of how you or your parents’ household size should be determined. Read the instructions carefully. Many students incorrectly report this number.
  • Amount of Your Income Tax: Income tax is not the same as income. It is the amount of tax that you (and if married, your spouse) paid on your income earned from work. Your income tax amount should not be the same as your adjusted gross income (AGI). Where you find the amount of your income tax depends on which IRS form you filed.
  • Legal Guardianship: One question on the FAFSA asks: “As determined by a court in your state of legal residence, are you or were you in legal guardianship?” Many students incorrectly answer “yes” here. For this question, the definition of legal guardianship does not include your parents, even if they were appointed by a court to be your guardian. You are also not considered a legal guardian of yourself.

4.      Inputting Incorrect Information

The FAFSA is an official government form. You must enter your information as it appears on official government documents like your birth certificate and social security card. Examples:

  • Entering the Wrong Name (Yes, I’m serious): You wouldn’t believe how many people have issues with their FAFSA because they entered an incorrect name on the application. It doesn’t matter if you’re Madonna, or Drake, or whatever Snoop Lion is calling himself these days. You must enter your full name as it appears on official government documents. No nicknames.
  • Entering the Wrong Social Security Number (SSN): When we process FAFSAs, we cross check your social security number with the Social Security Administration. To avoid delays in processing your application, triple check that you have entered the correct SSN. If you meet our basic eligibility criteria, but you or your parents don’t have a SSN, follow these instructions.

5.      Not Reporting Parent Information

Even if you fully support yourself, pay your own bills, file your own taxes, you may still be considered a dependent student for federal student aid purposes, and therefore, you’ll need to provide your parent(s) information on your FAFSA. Dependency guidelines for the FAFSA are determined by Congress and are different from those of the IRS. Find out whether or not you need to provide parent information by answering these questions.

6.      Not Using the IRS Data Retrieval Tool

For many, the most difficult part about filling out the FAFSA is entering in the financial information. But now, thanks to a partnership with the IRS, students and parents who are eligible can automatically transfer the necessary tax info into the FAFSA using the IRS Data Retrieval Tool. This year, the tool will launch on February 2, 2014. In most cases, your information will be available from the IRS two weeks after you file. It’s also one of the best ways to prevent errors on your FAFSA and avoid any processing delays.

Note: If you used income estimates to file your FAFSA early, you can use the IRS Data Retrieval Tool to update your FAFSA two weeks after you file your 2013 taxes.

7.      Not Signing the FAFSA

So many students answer every single question that is asked, but fail to actually sign the FAFSA with their PIN and submit it. This happens for many reasons, maybe they forgot their PIN, or their parent isn’t with them to sign with the parent PIN, so the FAFSA is left unsubmitted. Don’t let this happen to you. If you don’t have or don’t know your PIN, apply for one. If you would like confirmation that your FAFSA has been submitted, you can check your status immediately after you submit your FAFSA online.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

5 Reasons You Should Complete the Free Application for Federal Student Aid (FAFSA)

Did you hear? The 2014-15 FAFSA became available on January 1, 2014!


Click here for an alternate version of the video with an accessible player.

If you will be attending college between July 1, 2014 and June 30, 2015, you should complete the FAFSA. Here are some reasons why:

You may need it to apply for state and college financial aid and even private scholarships!

Completing the FAFSA is the first step toward getting financial aid for college, career school, or graduate school. The FAFSA not only gives you access to the $150 billion in grants, loans, and work-study funds that the federal government has available, but many states, schools, and private scholarships require you to submit the FAFSA before they will consider you for any financial aid they offer. That’s why it’s important that every college-bound student complete the FAFSA, even if you haven’t qualified in the past. You’ll never know what you get unless you apply.

It’s FREE!

The FAFSA is free to complete and there is help provided throughout the application. Several websites offer help filing the FAFSA for a fee. These sites are not endorsed by the U.S. Department of Education. We urge you not to pay these sites for assistance that you can get for free at the official FAFSA website: www.fafsa.gov.

It’s easier than ever.

We’ve done a lot over the past few years to simplify the FAFSA. One of the most exciting enhancements has been the launch of the IRS Data Retrieval Tool. The tool allows students and parents to access the IRS tax return information needed to complete the FAFSA, and transfer the data directly into their FAFSA from the IRS Web site with just a few simple clicks. This year, the IRS Data Retrieval Tool will launch on February 2, so be on the lookout for that. Also, for those who have completed the FAFSA in the past, when you go to renew your FAFSA for the upcoming school year, a lot of your information will automatically roll over, saving you lots of time.

It takes less than 30 minutes to complete.

Did you know that, on average, it takes only 23 minutes to complete the FAFSA? That’s less time than it would take you to watch your favorite TV show! And think of the benefits! Spend 30 minutes completing the application and you could qualify for thousands of dollars in financial aid. Talk about return on investment…

More people qualify than you’d think.

If you don’t fill out the FAFSA, you could be missing out on a lot of financial aid! I’ve heard a number of reasons students think they shouldn’t complete the FAFSA. Here are a few:

  • “I (or my parents) make too much money, so I won’t qualify for aid.”
  • “Only students with good grades get financial aid.”
  • “The FAFSA is too hard to fill out.”
  • “I’m too old to qualify for financial aid.”

These are all myths about financial aid. The reality is, EVERYONE should fill out the FAFSA! Don’t leave money on the table.

For information and tips on completing the FAFSA, visit StudentAid.gov/fafsa.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.