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Student Loans Law

Tips for Dealing With Student Loan Debt

Welcome to the fastest way to find out about managing student loan debt in State.

Here, you'll find clear and accurate information about paying off your student loans, including how to:

• how to get the most out the new 2022 loan forgiveness, forbearance and discount repayment programs
• find basic information about your loans
• choose the best repayment plan
• reduce or postpone your student loan payments
• cancel your loans, if you qualify
• get out of default
• get help with student loan problems, including filing a student loan complaint
• and more

To begin, keep in mind these basic tips for dealing with your debt:

• Know Your Loans
• Get Organized
• Don't Miss Your First Payment
• Pick the Best Repayment Plan
• Pay High-Interest Debts First
• Understand When Your Student Loans Can Be Canceled or Forgiven
• Do All You Can to Avoid Default
• Don't Get Scammed 

Know Your Loans

You can't manage your student loan debt unless you understand what you owe and how to pay. Make sure you know the balance on each of your loans, when payments are due, and where to send them. (If your lender offers an electronic payment option, sign up for it if you can. Your payments will never be late, and you may also qualify for a reduced interest rate.)

If you don't know the basic terms of your student loans, contact your loan servicer. And if you're not sure who that is -- some borrowers have multiple loan servicers -- see Tips for Finding and Working With Your Loan Servicer.

Get Organized

Set up files for your loan documents -- perhaps a paper file for documents you get in the mail and a computer folder for electronic correspondence. Read all mail and notices about your loans and keep copies of anything important, especially documents you've signed.

Don't Miss Your First Payment

Most student loans come with a grace period -- that is, a period of time after you leave school when you aren't required to make payments. Grace periods are usually six or nine months, but they vary depending on the type of loan. A surprising number of student loan borrowers default on their loans because they don't know when their grace periods end. Mark payment due dates on your calendar -- and know that you are required to make on-time payments even if you never receive a bill or notice from your lender.

Pick the Best Repayment Plan

When it's time to start paying back your student loans, you'll probably face a variety of repayment options, from a standard ten-year plan to extended plans that base your payments on how much you earn. Learn about the plans available for each of your loans and choose the options that allow you to get out of debt as fast as possible. Many experts say that your student loan payments shouldn't exceed 8% to 10% of your gross monthly income. You may want to use that as a rough guide, keeping in mind that if you extend the life of your loans, you'll significantly increase the amount you pay in the long run.

To compare repayment plans, you can use the Repay Student Debt calculator offered by the Consumer Financial Protection Bureau (CFPB). Whether you have federal student loans, private loans, or both, this calculator is a great place to start evaluating your repayment options.

Pay High-Interest Debts First

If you have student loans at different interest rates, concentrate on paying the costlier loans first. And don't forget to consider other debts as well. It doesn't make sense to put extra cash toward paying off a student loan with an 8% interest rate if you're carrying debt on a credit card that charges 15%. Get rid of the credit card debt and put those cards away, then focus on the next high-interest debt.

Understand When Your Student Loans Can Be Canceled or Forgiven

In cases of extreme hardship, or if you work in public service, you may qualify for complete or partial cancellation of your student loans. It's not easy to meet the conditions for cancellation or forgiveness, but if you're struggling to make your payments, it may pay to know the rules of these programs. 

For information, see Can I Cancel My Student Loans? and Student Loan Forgiveness Programs.

Do All You Can to Avoid Default

Defaulting on your student loans can result in a lifetime of financial headaches, from ruined credit to relentless collection agencies, from lost wages to lawsuits. Federal loans usually go into default after nine months of missed payments; private loans may be considered in default if you miss just one bill. Fortunately, most lenders want to work with borrowers to prevent default, and there's a wide variety of options to keep you out of hot water, including deferment, forbearance, and flexible payment plans. To learn about these options and more, see Avoiding Student Loan Default.

Don't Get Scammed 

If someone promises to get you out of student loan debt for a fee, watch out. There's no charge to apply for loan cancellation or forgiveness programs. The only time it makes sense to pay someone to help with your loans is if you're having problems so severe you need a lawyer -- for example, if collection agencies are breaking the law by harrassing you, if you get sued, or if you want to try to get rid of your loans in bankruptcy. 

To learn how con artists try to take advantage of student loan borrowers, see Avoiding Student Loan Scams and Pitfalls. For more information about hiring a lawyer, see How to Find a Student Loan Lawyer in your state. 

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Student Loans Law