5 Common Student Loan Mistakes

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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.

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.


  1. Hi, my student loan do mounts didn’t go through till last month, and they started charging me, I’ve called numerous of times and talked to three differnt people. 2 sti

  2. One trick to paying you loans down faster without increasing your monthly payment is to make a small payment every day instead of one payment a month. Why? Compounding interest increases the amount you owe. Pay your interest off daily and you can avoid the high cost of compounding interest!

    Try it, it works! (I send a payment on every business day of the month through my banks automatic bill pay. Divide your monthly payment by 20 business days and make that payment daily. A greater percent of each payment pays down your balance instead of paying interest meaning saved money and quicker payoff!)


    • Now do u have to make sure every Payment you do everyday adds up to your monthly payment due date like pay 10.00 each day for 20 days ? Will they except daily payment in stead of monthly

      • This isn’t entirely true.

        If you pay well in advance of a scheduled payment the lender will see it as an extra payment for the month. So you could end up making 19 extra payments (provided the lender tolerates that many payments) and one on-time payment that is insufficient. This happened to me once. I paid in the 1st, but my due date was on the 25th. They happily took my $600.00 payment on the 1st. Then later I got a notice I hadn’t paid my federal student loan payment. They claimed I made a voluntary extra payment. So I ended up having to scramble together another $600.00 as they refused to work with me on crediting the prior payment.

  3. Not all of this advice is good. Your servicer is not going to inform you of programs in place to reduce or forgive a portion of your loan. Your servicer is not going to tell you that consolidating your loan will change your interest to a simple from a compounded interest. Compounded interest is similar to credit card interest, calculated on a daily basis. A loan consolidation through a reputable company can save you thousands and offer in some cases partial loan forgiveness.

    • Why do we always have to talk about ‘forgiveness’? It’s a LOAN, not a GIFT. I’m a 72-year-old retiree and have NEVER in my life failed to pay what I owed to anyone, I was taught that if you couldn’t do something you weren’t strong enough or weren’t trying hard enough.

      • Good for you. In the meantime if someone is going to offer me an out on my $120k+ of student loans I’m taking it. Kinda like working for public service versus private sector. I couldn’t afford to offer my skills to the public sector on a $45k salary, but with Income Based Repayment (IBR) and Public Student Loan Forgiveness (PSLF) I can. I get to work for government agencies (out of choice) that pay significantly less than the private sector because of loan forgiveness and repayment options.

  4. With well over US$1.2 *trillion* in student loans outstanding as at May 2015, over 60% of which are in default, the federal government is once again precipitating the type of crisis our nation suffered with the home mortgage loan market collapse. If a foreign enemy had done this to our nation we would consider it an act of war. Even short of a total market collapse, individual borrowers are currently forced to make suboptimal career, family, and lifestyle choices which hobble our nation’s global competitiveness. The current system is immoral and untenable.

    All education should be free here just as it is in the majority of our allies (and almost all of our enemies). Vote your only option to dump this national embarrassment, force all the bureaucrats involved in this scam to get real jobs, and get your life back on track. Either that or simply move abroad, renounce you citizenship, and dismiss the parasitical “giant vampire squid” US Department of Education from its predatory grip on your life.

    • I completely agree. It has taken me 11 years to finally get a job with my IT degree. Of everyone that I am still in contact with from college, about 10 people, I know of only one other person that actually is using their degree in their job. I love the statement you made ” individual borrowers are currently forced to make suboptimal career, family, and lifestyle choices” it is so true. The last 10 years have been terrible for me on an economic scale. My student loans hover over me like a dark cloud, affecting where I can live, what I can drive, when I can buy clothes (rarely, it turns out. ive got shirts I wore to class still… gas and food seem to be more important than wardrobe). It is crazy to me the way our Government can perpetuate this kind of debt as a good idea for the American population. Government student loans are like a credit card for our government. Compounded interest, no end term, and almost nothing short of paying them off or death (and sometimes not even death) gets rid of the loans. Its just a constant stream of money for the government to play with.

  5. Did you know that when you consolidate your loans, the loan is renewed with a new start date. I paid on my loans for 10 years starting in 1994, and consolidated the loans in 2004 and now those 10 years of payments are gone and started my loans as if I graduated in 2004.

    • Maybe I’m overthinking this…. so consolidating loans is a good thing in your case? Sorry, I’m going to be graduating in a few months so I’m wondering…

  6. I wish I had found this information sooner. I’d been previously looking for this information to no avail. This was just exactly what I needed.

  7. This is not much help to those of us paying off our loans years after graduation

  8. The sadness and reality is that as adults seek to further education it becomes so easy to get taken by colleges and universities that seek to have your best interest. I think about how years ago I wanted to further my education and study nursing. I could not afford to leave my job and enroll in a program so I began to look at online schools. I found one that would allow me to study independently. Fortunately, I was able to realize that they were not accredited and even if I finished the program who would hire me because I would not even be able to sit and take the nursing exam. It took me a long time to get away from the school. They went so far as to threaten to take money from my account to still pay for the course I told them I was not going to take. I am thankful that there are governmental agencies that have the best interest of students at heart.

    • “I am thankful that there are governmental agencies that have the best interest of students at heart.”

      Where exactly did you find “governmental agencies” with the “best interest” of anyone other than their wallet?

    • You can do it on your own if you really want to. All through my 42-year career in IT, it was my practice to sign up for evening classes at local educational institutions, usually one class at a time so I could afford it. Meant giving up my evenings and giving up some of the ‘fun’ things in life, but it paid off big time for my career and financial security, and my credit report too.

  9. From the few details that I have it seems like you shouldn’t worry too much. Sounds like your loan is in the underwriters hand at this point so there is not much that your LO can do to rush it. Although it would be good for him or her to give you a call and tell you this. Recently the underwriting process for banks is taking a bit longer than it has been in the past few years due to the circumstances in the market. I also have been waiting on approval for myself since October 11 and finally got it today! I am a Real Estate Agent in CA. If this is where you are purchasing your home your contract will specify that you have 17 days (unless a different time frame was agreed upon) from the date of acceptance to obtain loan approval from the bank. This is good to know in the event that the seller starts putting pressure on you. Good Luck!!

  10. Greetings,

    My name is Alethia McCullough, and I am a highly qualified educator in Maryland. I would like to know if it is possible to volunteer to help the educational committee over the summer?

    I have worked in the DC, Maryland, and Virginia areas. I have also participated in the PGCEA and Maryland State Unions as an activist and elected representative. In addition, I’m in the final stages of the National Board Certification process.

    Therefore, I would like to serve as a voice for my peers who are quite often overlooked by our unions and the greater good of politics. Consequently, these over sights also hurt our students because decisions are being made that are not in their best interest either. Finally, I’d like to experience our government in action, to better understand the process at all levels.

    No job would be too small. I’ve taught every grade level from 6th grade to community college, adults, and at a youth correctional facility.


    Alethia McCullough

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