Stop Making These Student Loan Repayment Mistakes

Student loan debt is tough to handle. Trust me, when I came out of law school, I couldn’t believe how much student loan debt that I had accumulated. I was so embarrassed by the amount of debt that I didn’t tell Marjorie (until after we were married!).

That is a story for another day. But, what I did learn is how easy it is to make mistakes when it comes to student loan debt. Many graduates (maybe even you!) keep making financial mistakes that could make the debt load even worse. There are some things that you should stop doing or never do - and there are some things that you should always do - in order to make sure that you get a good grip on your student loans from the start.

Take a look at this list of student loan mistakes. Are you making any?

1. Not taking advantage of repayment plans offered.

If you know that you are going to have a problem repaying this debt, you need to go to the government loan website Take a few minutes to work your way around the site. You will notice that there are all kinds of ways to repay a student loan. Figure out which way might be right for you. Again, the most important part of this exercise is for you to take action and get on the website. The worst thing that you can do is fall behind on payments or just default, which can cause all kinds of credit report backlash (backlash that you may not be able to get out from under any time soon).

Check out the income-sensitive options, see if you qualify for deferment or a lower payment through a particular career choice, and call a loan representative to see if you can choose to lower your payments somehow. It can be frustrating to fill out some of those lengthy forms online (that’s for sure), but take the time now and do everything you can to avoid falling behind.

2. Not realizing that some things are more important than paying your student loan.

Wait, What? Did I just say that? You bet your degree I did! You may be in your twenties or thirties, but you have to start saving for your retirement. Are you going to rely on Social Security? The government? How about that huge inheritance? Yeah, me neither. So, maybe this isn’t the worst idea that I have ever had.

Actually, this is the biggest mistake that I made. I put off my future for my present. I couldn’t see past my mountain of student loan debts. If you can’t save any money because you are paying a student loan or two (or ten!), it’s time to get your priorities in order.

How can you do that? Well, I’m glad that you asked. Try and defer your loans or pay them off or find a payment option alternative - anything to allow yourself to save money for your future. Do not assume that paying off a student loan should take precedence over saving for retirement.

The thing about saving for retirement is that you can start at any time. Even if you’ve been paying your student loans for decades and have no money saved, you can start a program right now to save money for retirement. Put yourself first. Many financial gurus say to pay yourself first. Well, in this case, I would agree with that philosophy.

3. Neglecting to choose the automated payment option.

This was a big one for me. I didn’t want to give up my personal information to anyone. I don’t trust banks to protect me, my personal information, or my money. I certainly don’t trust student loan companies. So now you want me to trust my bank to pay my student loan company each and every month in a timely fashion?

But when you look at the downside, forgetting to make a payment can end up in default and falling behind on payments can really mess up your credit. What’s the alternative? Sign up for automatic payments as soon as possible. Let the student loan companies take money out of your bank account monthly. This way, you don’t have to worry about missing a payment. Even better, if they screw it up, you may be able to sue them.

4. Refinancing with a private lender.

This option may be in your best interest, and then again, it might not. I was against refinancing with a private lender until I actually met someone that it worked really well for. So, I like to make everyone aware of the option and to investigate it as part of creating your repayment strategy. Federal loans might be hefty but the government allows some flexibility.

If you refinance with a private lender in order to lower payments, you may be switching something that’s bad for something worse. You could lose any government repayment options that you might have had. You’ll also lose any government benefits offered. Read the fine print twice, ask lots of questions and make sure it’s a good swap for you and your financial future.

5. Not getting help when you need it.

Sticking your head in the sand is not a plan. I didn’t do this, but I know many people who tried. It didn’t work. The student loan debt collectors will find you. If you have defaulted and are under a pile of federal student loan debt with no apparent way out, you might need help. For federal student loans, you can go to for assistance.

But, if you have private loans, remember that they play by different rules. Don’t ignore those private loan debt collector calls and hope they will all go away - they won’t. Reach out to us today for the real help that you need. Student loans are hard to deal with but not quite as hard as being hounded by creditors on a regular basis. Options are out there, but you have to take the first step. Start today.