Start Handling Your Student Loan Repayment in 4 Steps

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Student loan repayment can be overwhelming.

It may be tempting to “think about it later” or stop paying on your loans when the budget gets tight. As much as you might be tempted to pretend that the problem doesn’t exist, ignoring your student loan payments or letting them go into default status can have serious consequences.  Potential consequences of defaulting on your student loans may include:

  • Wage, tax and/or social security garnishment
  • Denial from potential employers
  • Negative impact to your credit
  • Higher interest rates on loans
  • Diminished ability to apply for additional loans or educational opportunities
  • Loss of Federal Loan benefits
  • Entire amount of Federal Loan and outstanding interest could become due immediately upon default

You are not alone!

Student loan debt has become a national crisis, with millions of Americans struggling to pay their loan balance. Remember that you are not alone in this battle. A lot of focused attention is being provided by governmental and non-governmental agencies to help consumers find workable solutions.  By actively addressing your student loans, you can become part of the solution.

Four-Step Method to Paying Student Loans

Reaching your destination is much easier when you have a roadmap to follow.  You can get started with a four-step method to get yourself on the road to paying off your student loans:

1. Organize Your Loans

Once you have decided to pay your student loans, the first step is to organize your loans. Write down your total debt, and organize it by lender and amount if you have multiple loans. Note the account information for each so that you have everything logged in one place. The Department of Education provides a helpful online tool to assist you in this process.  Visit the National Student Loan Data System to look up specifics of your loans.  If you are missing your Federal Student Aid PIN number (which is necessary to access your loan information) you can visit to create a new one.

2. Educate Yourself

Your learning should never stop, even if school is a distant memory. It’s time to put your learning cap on and educate yourself about student loan repayment options.  If you do not understand the meaning of consolidation or the difference between federal loans vs. private loans, take the time now to educate yourself on the language of student loan repayment.

Talking with a financial advisor can help you understand what your creditors are saying when they contact you about your loans. The NFCC can assist you in finding a Certified Student Loan Counselor who will review all of your finances and help you develop a personal debt repayment plan.

3. Build a Repayment Plan

If you cannot afford the monthly payments set by your lenders, you have options.  There are multiple types of repayment plans available for you.  You can learn more about your various options through financial counseling with a student loan counselor, or by performing your own personal research.  Whether you choose to tackle your loans on your own or with the help of a counselor, you will need to develop a plan and be ready to carry it out.

4. Stick to Your Battle Plan

Once you choose a repayment plan that works for your unique circumstances, congratulate yourself! You have planned out your personal roadmap to freedom from student loan debt!  Now comes the task of following that roadmap and staying on track. Figure out what motivates you and reward yourself periodically as you accomplish your monthly goals.
Paying off student loans can feel like an impossible goal, but take a deep breath—you have all the tools you need to begin paying off your student loans and establishing a healthy financial future.
About the Author Tracy East – Tracy was Director of Communication for Consumer Education Services Inc., overseeing web content, social media, outreach and education.