10 Student Loan Repayment Mistakes


Student loans present a major problem for many American consumers. As current college graduates are entering the workforce with student loan debt amounts over $100,000, the thought of paying back these obligations can be extremely intimidating, if not impossible.

Student loans remain with the consumer, until they are paid as they can be very difficult to discharge in a bankruptcy case. Many student loan borrowers tend to make common mistakes when repaying their loans that can make the process much harder for them in the long run. It helps to know these mistakes in advance when repaying a student loan obligation.

1. Not Knowing How Much You Owe

The first recommendation is to know how much the student owes. It may be shocking to see that large amount, but it also helps to have that hit of reality in knowing where the student is starting before beginning repayment.

Many colleges will sit down with the future graduate for an exit interview where that student will get the total amount he or she will owe after graduation.

2. Not Knowing Your Interest Rates

It is also recommended that the borrower knows what his or her interest rate is on each loan. If he or she has a combination of public and private loans, determine the interest rate is on each type of loan.

3. Not Researching What Your Payments Will Be Before You Graduate

Know what the monthly payment will be for these loans ahead of time so that a proper budget can be prepared to keep up with these payments.

4. Not Watching Your Repayment Progress

Also, keep an eye on the balance as payments are made. See where progress is being made as the payments are processed.

5. Ignoring the Loans Until After Your Grace Period

One mistake borrowers make is to not make a repayment plan quickly. It is best that as soon as the amount owed is known that the borrower work on a repayment strategy, even if the student is still in school.

Many students live in denial and avoid the inevitable until it is absolutely necessary. All that does is give them a rude awakening when that first bill arrives. The best thing a borrower can do is work out a budget and plan to hit the ground running with manageable monthly payments as soon as the grace period is over.

6. Paying Only the Minimum Payment

Many borrowers pay as little as they can for as long as they can. All this does is draw out the repayment period and increase the amount owed. Many borrowers are still paying on their loans well after they are in their 40s. If it is possible, try to pay off the loan obligations as quickly as possible. This will not only get rid of that debt burden early for the borrower, but he or she will also end up paying less on interest in the long run.

7. Not Looking Into Your Payment Options

Many borrowers also do not know their repayment options. Nor do they realize that they can adjust the payment’s due date to fit their life circumstances. Many times, the default due date given by the lender may make it difficult for the borrower, depending on when and how often they are paid.

If the borrower is aware that the date presents a problem and does not try to work out a new date with the lender, he or she may be setting himself or herself up for failure in keeping up with payments.

8. Forgetting to Update Contact Information After Graduation

It is also up to the borrower to keep his or her contact information current with the lender, including mailing address, phone number and email address. Not receiving a statement or bill because the lender does not have updated information is not a legitimate excuse for missing a payment.

9. Using Forbearance Too Often

Occasionally, a borrower may need to utilize the forbearance option if he or she falls into a difficult financial situation. Forbearance allows the borrower to put a temporary halt on payments during difficult financial situations, such as job loss.

However, many borrowers use this option too frequently. It is meant to be a short-term solution, only to be used if absolutely necessary and not for any situation that may be deemed a small financial “crisis.” If possible, cut other expenses before cutting student loan payments.

10. Student Loan Scams

One last problem that many borrowers run into involves student loan repayment scams, as they do exist and are out there. If something sounds too good to be true and seems to offer a quick fix, it is likely not a legitimate repayment option.

Many of these scams come in the form of any unsolicited communication, such as a phone call or email, where a company says they can get the borrower’s loan obligation forgiven. Nothing is ever that easy, and when in doubt, be cautious.


An experienced Texas bankruptcy lawyer can help you with any questions you may have about repaying student loans and managing debts. Call the Law Office of Marilyn D. Garner NOW at (817) 505-1499 for a free consultation to discuss how bankruptcy may help you.

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