5 Things To Consider When Taking Out Student Loans


Federal student loans can be a great way to help pay for college or career school. While you shouldn’t be afraid to take out federal student loans, you should be smart about it. Before you take out a loan, it’s important to understand that a loan is a legal obligation that you will be responsible for repaying with interest.

Here are some tips to help you become a responsible borrower.

  1. Research starting salaries in your field. Ask your school for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate. You can use the U.S. Department of Labor’s Occupational Outlook Handbook to estimate salaries for different careers or use a career search tool to research careers and view the average annual salary for each career.
  2. Keep track of how much you’re borrowing. Don’t wait till right before you graduate to figure this out. Think about how the amount of your loans will affect your future finances, and how much you can afford to repay. Your student loan payments should be only a small percentage of your salary after you graduate (8% is a good rule of thumb!), so it’s important not to borrow more than you need. If you’ve already borrowed for your education, you can view all of your federal student loan information in one place. Go  to nslds.ed.gov, select Financial Aid Review, and log in. You can also use our Repayment Estimator to calculate what your monthly payments might be based on your current loan balance.
  3. Understand the terms of your loan and keep copies of your loan documents. When you sign your promissory note, you are agreeing to repay the loan according to the terms of the note even if you don’t complete your education, can’t get a job after you complete the program, or didn’t like the education you received.
  4. Keep in touch with your loan servicer. Your loan servicer is the company that handles the billing and other services on your federal student loan on behalf of the U.S. Department of Education. When you begin paying back your loan, you will work directly with your loan servicer. Also, make sure you notify your loan servicer if you change your name, address, or Social Security number or when you graduate, withdraw from school, drop below half-time status, or transfer to another school. Staying in contact with your servicer will make it easier for you to successfully repay your student loans once you’ve left college.
  5. Stay ahead of your student loan payments. Once your loan enters repayment, you are required to make your scheduled loan payment as determined by your repayment plan.  If you’ve done your homework, your scheduled monthly payment amount won’t be a surprise and you’ll be prepared to begin making payments. But, if you do find yourself having trouble making your scheduled loan payments, take advantage of our flexible repayment options. Contact your servicer immediately to discuss ways to keep your loan in good standing.

Remember, federal student loans are an investment in your future so invest wisely and borrow only what you need. Find out more about student loan repayment, including when repayment starts, how to make your payment, repayment plan options, and more!

Tara Marini is a communication analyst at the Department of Education’s office of Federal Student Aid


  1. Entrance Counseling is not something that Colleges/universities force student to complete, Its actually the Department of Education’s requirement to borrow through the loan program. Schools are required to notify students who wish to borrow that they must complete Entrance counseling and receive confirmation that they student completed it before the loans can be processed onto the students account. Before you comment, you should really know what you are talking about! That being said, most schools have financial literacy programs for students to learn about smart borrowing etc but even with all the snappy titles, free pizza and candy, many students do not attend the information sessions or read their Aid office’s stall seat journal.

  2. Good points on the article. It would be particularly helpful if schools would advise on these points and not burden students with “entrance counselling” which confuses the issue with complex terminology that a student will not read.

  3. Only one thing to remember: The $1.3 Trillion student loan mess will metastasize and become a $2.5 Trillion student loan mess in the next 10 years, according to the CBO.

    One important factor in ED ever having even a prayer of seeing this money paid off is get rid of the useless guaranty agencies and private collection agencies. They add no value to the process. ED brought federal student loan origination in-house a few years ago and the world did not come to an end. It’s time to end the needless rent-seeking behavior of for-profit corporations in student loan servicing and collections.

    The IRS tried private collection agencies – TWICE – in recent years, and the results were predictably disastrous.


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