Student Loan Success Guide

Student Loan Success Guide

Top Tips for Managing Your Loans

•  Log in to StudentAid.gov to view your loan balance and interest rates.
• Check your loan servicer’s website for your monthly payment amount.

• Options include fixed payments or plans based on your income.
• Use the Loan Simulator at Loan Simulator to find the best plan for you.

• Pay online through your loan servicer’s website.
• Enroll in auto pay to ensure on-time payments and earn an interest rate discount.

•  You may qualify for programs like:
  • Public Service Loan Forgiveness
  • Teacher Loan Forgiveness
  • Income-Driven Repayment Forgiveness (IDR)

• Contact your loan servicer to:
  •  Lower your payments with Income-Driven Repayment (IDR).
  • Temporarily pause payments through deferment or forbearance.

Consequences of Default

Defaulting on your federal student loans can significantly impact your financial stability and future opportunities.

Key Consequences Include:

•  Immediate Payment Due
  • The entire unpaid balance and interest become due immediately (“acceleration”).

• Withholding of Federal Payments
  • Tax refunds and federal benefit payments may be withheld to repay your defaulted loan (“Treasury offset”).
•  Wage Garnishment
  • Your employer may be required to withhold a portion of your wages to repay the loan.
• Loss of Benefits
  • You lose eligibility for deferment, forbearance, and repayment plan options.
• Ineligibility for Federal Student Aid
  • You cannot receive new loans or grants, such as Federal Pell Grants.
• Damage to Your Credit
  • Default is reported to credit bureaus, lowering your credit score and affecting your ability to borrow for major purchases.
• Legal Action
  •  Your loan holder can take you to court, resulting in court costs, attorney fees, and collection fees.
• Difficulty with Assets
  • You may not be able to buy, sell, or maintain certain assets, such as real estate.
•  Transcript Access Issues
  • Schools may withhold official transcripts. However, you are entitled to request an unofficial transcript for transfer purposes. If denied, file a complaint with the Consumer Financial Protection Bureau.
• Years to Recover
  • Rebuilding credit after default can take years, impacting future financial goals.

• Interest is the cost of borrowing, calculated as a percentage of the unpaid loan balance.
• View your loan interest rates on your My Aid page at StudentAid.gov.

• Pay through your loan servicer’s website. 
• Set up auto pay for automatic deductions.

• Missing payments can lead to delinquency and default.
• Reach out to your servicer immediately if you’re struggling to pay.

• Standard Plan: Fixed payments over 10 years.
• Income-Driven Plans (e.g., SAVE): Payments based on income and family size.
  • Payments could be as low as $0.
  • Forgiveness after 20-25 years of qualifying payments.

You may qualify for forgiveness if you meet specific criteria:

• Public Service Loan Forgiveness (PSLF): For government and nonprofit employees.
• Teacher Loan Forgiveness: For eligible educators.
• Income-Driven Forgiveness: After 20-25 years on an IDR plan.

• Your servicer can help with repayment plans, forgiveness, and more.
•  Find contact info by logging into StudentAid.gov.

• Use Aidan®, the virtual assistant, on StudentAid.gov.
• Call the Federal Student Aid Information Center: 1-800-433-3243.

• Aidvantage:
  Phone: 1-800-722-1300
  Website: Aidvantage
• MOHELA:
  Phone: 1-888-866-4352
  Website: MOHELA
• Nelnet:
  Phone: 1-888-486-4722
  Website: Nelnet
• Edfinancial:
  Phone: 1-855-337-6884
  Website: Edfinancial
• Great Lakes:
  Phone: 1-800-236-4300
  Website: Great Lakes

 

If you don’t know who your loan servicer is, call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

•  Review your student loan balance on your Dashboard.
• Choose a repayment plan based on your income. Loan Simulator can help you decide which plan is right for you.
•  Visit your loan servicer’s website if you need help. Loan servicers are an important resource.
• Pay your student loans online through your loan servicer’s website. Tip: Set up auto pay to ensure on-time payments.
• Review the various loan forgiveness options.