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Find student loan articles to help you manage your debt and pay it off faster.
Student loans cause big problems for millions of Americans who borrowed to fund their education. People often wind up with more debt than most entry level salaries can afford to pay back. So, while a higher education may increase your lifetime earnings, it leaves you in a whole with debt. With that in mind, Debt.com strives to provide the latest news on student loans. We keep you up-to-date on changes to federal repayment plans and student loan forgiveness. And we compare options and get expert advice to help you eliminate your debts as quickly as possible.
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As student loan debt continues to climb, students and parents alike aren’t using all available resources to save money on college.
10 Creative Ways to Pay Off Your Student Loan Debt
Paying your student loans can take a long time. Here are a few unusual ways to speed up the process.
Student Loan Mistakes And How to Avoid Them
Nearly everyone thinks college is worth it, but that doesn’t mean you need to go into debt to get a degree.
How to Choose the Right Career Path to Stay Out Of Debt
Picking a career that makes you happy is important, but so is financial stability.
Student Debt: A National Crisis With No Sign of Slowing Down
Students borrow money without questioning the interest rates.
Americans Feel Positive Despite Large Student Loan Totals
Those closest to retirement are the most optimistic about getting out of debt.
Should You Combine Student Loans?
Private student debt consolidation loans allow you to combine both federal and private student loans into a single monthly payment, but you give up eligibility for federal relief programs and student loan forgiveness. Here’s what you need to know!
Student Debt Hurts Women More Than Men
Women are suffering from student loan debt at a higher rate than men, and this first-person account of drowning in debt shows it.
The Financial Panther Avoided Lifestyle Inflation
And he embraced the personal finance community as he paid down debt.
Student Loans: What America Doesn’t Know Is Killing Us
Most borrowers have no idea what they’ll owe in the future – or even how many years their loans are for
Man on the Street: What’s Your Take on the Student Loan Debt Crisis?
We hit the streets to ask people about the student debt crisis and how they hope President Trump may take action to provide relief.
Most Employees Don’t Get the Student Loan Help They Need
Companies could be doing their employees a huge service if they offered some — and sometimes better — student loan repayment assistance.
Student Loan Debt Is Killing Our Careers
Student loans are limiting career choices, and not just for millennials
Colleges are Failing Students in Financial Preparedness
Most grads feel like they’re “going it alone” with their finances
Damsel in Debt
Here’s how I found out the real balance of my student loans — and how I’ll keep owing more if I don’t act now.
College Grads Making More Sacrifices for Student Loans
Many Americans are figuring out the hardest lesson from college comes after you graduate
VIDEO: A Master’s Degree In Debt
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Part-Time Workers And Students More Likely To Default On Loans
Low-income workers struggle to pay back loans, but they don’t have to.
The Red Lobster Top Secret Student Loan Program
When companies try to get young people hired with the promise of ‘tuition assistance,’ here’s what they don’t tell you.
Why We Don’t Repay Our Student Loans
They’re easy to get, but hard to understand, and even harder to repay. Fortunately, there’s help.
America Owes $1.16 Trillion On Student Loans! YAWN
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Is It Safer To Take Out A Private Student Loan Than A Public One?
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Are The Latest Student Loan Proposals Any Good?
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If I Drop Classes, Will It Affect My Student Loan Payments?
Learn how dropped classes could start the clock on your federal student loan debt payments if you fall below a certain number of hours. It’s crucial to stay above half-time enrollment unless you want your loan payments to start soon.
Why Student Loans Are Good
As many problems as there are with student debt, there can be a good side to these loans as long as you maintain control of the debt. Learn why student loan debt is considered “good” debt and how it can benefit you.
What Happens If I Can’t Pay My Student Loans?
If you don’t have money available to make your student loan payments, it doesn’t necessarily mean you’re headed for default. We explain how to avoid default and what you can do to keep your loans current until you can afford to pay.
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Congress has raised student loan interest rates, but one U.S. Senator has a fresh idea to lower them.
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I was a grad student who made costly mistakes and racked up big debt. Here’s how to avoid what I did.
5 Things to Know about Repaying Your Student Loans
#1: You may need 2 repayment strategies – federal and private
Not all student loans can use the same repayment strategies. That means you should really break your repayment strategy into two categories; you have one strategy for federal student loan debt and another for private.
This allows you to use federal repayment plans and loan forgiveness programs if you qualify. Those don’t apply to private student loans and you can’t include private debts in federal programs. Although you can use private loan consolidation on both types of debt, don’t do it! This converts federal debt to private, meaning you have fewer options available for relief.
If you have both types of loans, keep them separate and figure out the right repayment strategy for each.
#2: Interest rate reduction doesn’t really apply to federal loans
With many types of debt reduction – credit cards, private student loans and even tax debt – reducing the interest rate applied to your debt is a big part of seeking debt relief. The more you can reduce interest charges, the easier it is to repay your debt quickly. So, a higher credit score means lower interest rates and faster repayment.
But that really doesn’t work with federal student loans. Interest rates are not dependent on your credit score. Instead, rates are set based on which academic year you took out your loans. The Department of Education announces new rates each year; in the current system, rates are based on the 10-year Treasury Note Index.
When you consolidate your debt or enroll in a federal repayment plan, the new rate is set by taking a weighted average of the loans you include in the program. Unless you convert your federal loans to private (which we advise against above), rate reduction should not be your goal. Instead, you should aim for:
- The fastest repayment method possible
- The payment structure that fits your budget (i.e. monthly payments you can afford)
#3: Federal programs are subject to change
As with any federal relief program, student loan repayment plans and forgiveness programs are subject to change. Both Congress and the executive branch through the Department of Education can change or cancel these programs.
Congressional changes tend to be more drastic, but they take longer. Meanwhile the DOE can make small changes at their discretion, meaning adjustments happen much faster. But even those small changes can have a significant impact on how you repay your debt. For example, the DOE under Betsy DeVos have “tweaked” the eligibility requirements for Public Service Loan Forgiveness. This led to people who had previously certified their eligibility receiving notices that they were no longer eligible.
The moral of the story is that you can’t wait around or procrastinate when it comes to student loan repayment. In most cases, if you enroll in a program that gets changed or cancelled, you stay in under the rules that were there when you signed up. But if you sign up the day after a rule change, things may be different. With that in mind, never wait on solving your student loan debt. If a program fits, get in before they have time to change it.
#4: You can’t discharge any student loans during bankruptcy
No matter whether you hold private student loans or federal, it doesn’t matter -neither can be discharged through bankruptcy. The federal government changed bankruptcy filing regulations to prohibit student loan discharge except in cases of extreme hardship. This is extremely rare.
Once those rules were in place, private lenders made sure that limitation would extend to private student loans as well. As a result, even private student loans taken out through a traditional lender can’t be easily discharged. You must prove that repayment of your loans will cause extreme financial distress – and given that you’re already sitting in bankruptcy court, you can imagine how hard that would be. Essentially, you have to show your loans would put you right back into bankruptcy and keep putting you there. And that no amount of payment restructuring or settlement is possible.
For what it’s worth, Rep. John K. Delaney (D-Maryland) proposed an amendment this year that would change this rule. It’s called the Discharge Student Loans in Bankruptcy Act of 2017. Unfortunately, we checked with our Senior Policy Editor Brandon Ballenger; after some checking, he says that the bill has a less than 1% chance of passing.
#5: Federal student loan default works differently, too
On a normal debt, when you default it leads to a negative item in your credit report; this occurs once the creditor moves your debt to “charge off” status. You also incur negative items for each payment you missed leading up to the charge off. These negative marks decrease your credit score, and they stick around for seven years from the date you incur them.
Federal student loans are different (again). But here the difference works in your favor. If you fall behind on a federal student loan, simply make payments on time for six consecutive months. This moves your loan back to a “current” status and erases any missed payments as if they never happened. You can eliminate the credit damage so it’s easier to borrow and get approved for new credit.
This only works on federal student loans. It’s also important to note that you lose that ability to erase credit damage by using a debt consolidation loan. You can use Federal Direct Consolidation Loan to consolidate student loan debt; it brings defaulted debt current automatically. However, it does not erase the credit damage caused by missed payments.