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Managing Your Student Loan Debt

The cost of higher education continues to rise.  Unfortunately, it’s rising faster than the supply of grant and scholarship funds.  This means that students today are leaving school with greater indebtedness than ever before.  And yet, student loan defaults are at an all-time low!  This can only mean that students today are better informed, and better prepared to take positive steps toward financial responsibility.

Responsibility toward your student loans doesn’t just mean staying out of default.  It also means staying out of delinquency, keeping your account current.  This may not always be easy.  But we think these steps will help: 

  1. Know Your Rights and Responsibilities.
    At the time you took out your loan, your lender sent you a document that explained your Rights and Responsibilities.  If you’ve misplaced it, call your lender or servicer: they’ll be happy to send you another. For a list of servicers with contact numbers and e-mail addresses, click here.  Be aware of the Consequences of Default.  Also, know that there are distinct Benefits to Staying Current.
      
  2. Know Your Repayment Options.
    A loan from the Federal Family Education Loan Program (FFELP) offers many more options for repayment than most forms of credit.  To find out more, visit our Overview of Options.
     
  3. Keep in Touch. 
    Stay in close contact with your lender or servicer.  Make sure they hear from you whenever you have a change in your:
    bullet Name
    bullet Address
    bullet Phone numbers
    bullet E-mail address
    bullet School enrollment
    bullet Employment

    If they haven’t heard from you for a while, you may want to contact them now.  Click here for a list of servicers with contact numbers and e-mail addresses.

  4. Keep Your Credit Cards Under Control.
    Or, better yet, avoid them completely until you know you’re on solid financial ground.  Your credit card balances are harder to pay off than your student loans because their interest rates are so much higher.  Remember, your student loan is probably the first loan you borrowed.  It should be the first one you pay off.  Don’t let a lot of other debt get in the way of doing that.
      
  5. Ask for Help.
    If you’re having difficulty repaying your loans, don’t be afraid to talk it over with your lender or servicer.  Or your guarantor.  Or us.  We all want to see you be successful in repayment.  Generally, the earlier you ask for help, the easier it is to get it.
      
  6. Make a Budget.
    And make sure that it includes your monthly student loan payment.
    Need help in creating a budget?  Click here.
      
  7. Automate Your Payments. 
    We strongly recommend making payments by automatic monthly deductions from your checking account.  This removes the hassle of writing and mailing a check each month.  It also removes the temptation of using your funds for something else.  It may also make repayment cheaper for you: Many lenders and servicers offer interest rate deductions to borrowers who make their payments this way.  Your lender or servicer may also offer a rate reduction if you remain current for a specified period.  The surest way to remain current is to make automatic payments.



Student Loan Counseling Service, Inc
(888) 633-4850


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