• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • College Financial Aid
    • Financial Aid for College
    • Student Financial Aid Eligibility
    • Student Financial Aid
      • Student Loans for College
      • College Financial Aid 101
      • Need Based Student Loans
      • Financial Aid Forms (FAFSA & College Board’s Profile)
      • Military Student Financial Aid
        • College Benefits for Active Duty Military
        • National Guard Education Benefits
        • College Aid for Military Reservists
        • College Aid for Military Veterans
        • Military Dependent Financial Aid
    • Financial Aid Programs
    • Paying for College
  • Scholarships 101
    • College Scholarships (Overview)
    • College Scholarship Applications
    • College Scholarship Essay Writing Tips
    • Unusual Scholarships
    • Unclaimed Scholarships
    • Free College Scholarship Searches
  • Find a Scholarship
    • Latest Scholarship Postings
    • Student Scholarships by College Major
    • Scholarships for Hobbies and Interests
    • Sports Scholarships
    • Community Service Scholarships
    • Association Sponsored Scholarships
  • Find a Student Loan
    • Private Student Loans
      • Sallie Mae Student Loans
      • PNC Student Loans
      • Charter One Student Loan
      • Citi Assist Student Loans
      • Wells Fargo College Loan Programs
      • Texas Dow Employees Credit Union Loans
      • SunTrust Education Loans
    • How Do Student Loans Work?
    • Types of Private Student Loans
    • Student Loans to Cover Living Expenses
    • Private Student Loan Interest Rates
    • Graduate Student Loans from Private Lenders
  • Saving for College
  • Site Map

Financial Aid Finder

Your Guide to Maximizing your College Financial Aid

Financial Aid Finder HomePage
You are here: Home / Financial Aid News / 10 Steps to Prevent Defaulting on Your Student Loans

10 Steps to Prevent Defaulting on Your Student Loans

September 3, 2012 By mara

by Mara Strom

Did you know that a Stafford or Perkins student loan is one of the only forms of debt that cannot be discharged in a bankruptcy claim? Student loans are with you for life – so you need to be serious about paying them back.

If you haven’t paid back your loans for 270 days (and have not arranged for deferment or forbearance), then you’re in default. Three out of four people who default on their loans do so after dropping out of school.

In addition to trashing your credit rating and bringing collection agencies to your front door, defaulting on your student loans entitles the government to intercept your tax returns and garner up to 15% of your take-home pay. Convinced that defaulting is serious? Here are 10 steps to prevent it:

1. Don’t bite off more than you can chew. The cut-off point is a loan that’s twice your expected salary. Prepare to live like a starving student while you’re in college, so that you don’t have to when you graduate.

2. Read your note. Before you sign on the dotted line, make sure you fully understand the terms. This loan is your responsibility. Not even getting hitched will change that – since your student loans can no longer be consolidated with your spouse’s.

3. Get organized. Make a spreadsheet with the names of your lenders, amounts of each loan, interest rates and monthly payments. Tally up the total and confirm that you can pay that big number on your monthly salary. If not, consider consolidation (see #7).

4. Be a bookkeeping nerd. Once your grace period ends, make sure you have a file for each student loan that contains the following: all personalized communication with your lenders, cancelled checks, consolidation offers and approvals of deferment or forebearance (see #8).

5. Be punctual. Make your monthly payments on time. Set up an automatic debit from your checking account, if you’re lax about deadlines.

6. Stay in touch. Notify lenders immediately if you move, get married or change your student status.

7. Consider consolidation. You can reduce your total monthly student loan payment by consolidating – either by getting a lower interest rate or by extending the life of your loan. Either way, you’ll only have to worry about one monthly payment.

8. Ask your lenders for help. If you lose your job or have to take a pay cut, you may not be able to make your monthly student loan payments. Apply to your lenders for deferment or forbearance. While you’re waiting for approval, keep paying back your loans. Remember: You can’t get approved if you’re in default.

9. Ask your lenders for more help. If your loss of income is permanent, ask your lender about alternate repayment, which will reduce your monthly bill by lengthening the life of your loan. You will pay more in the long-run, since interest never steps accruing, so consider this an almost last-resort option.

10. In the worst-case scenario, pay back the federal government first. If you’ve got both federal and private student loans and you’re about to default on them, do whatever it takes to keeping afloat on the federal ones. They have more flexible repayment options – and harsher penalties for default.

For more on student loans

Sallie Mae Student Loans Ad

Filed Under: Financial Aid News, Student Loans Info Tagged With: financial aid, Student Loans Info

Primary Sidebar

FinancialAidFinder Logo
Sallie Mae Student Loans Ad

Latest Scholarship Postings

Procter & Gamble STEM Scholarship (Deadline: March 9, 2021)

February 27, 2021 By The FinancialAidFinder Scholarship Team

Gabriela Blanco College Scholarships (Deadline: April 1, 2021)

February 27, 2021 By The FinancialAidFinder Scholarship Team

The Charles A. and Patsy Collat, Sr. Family Scholarship Program (Deadline: March 31, 2021)

February 27, 2021 By The FinancialAidFinder Scholarship Team

FPMA Scholarship (Deadline: April 15, 2021)

February 27, 2021 By The FinancialAidFinder Scholarship Team

More Scholarship Listings

Sallie Mae Student Loans Ad

Explore Financial Aid Finder

  • College Financial Aid
  • Student Scholarships
  • Financial Aid Info
  • Student Scholarship Search
  • Find Student Loans
  • Military Financial Aid
  • Saving for College
  • Grants for College
  • Cookie Policy

Tags

529 plans athletic scholarships college college financial aid college savings plan college scholarship college scholarships college student loans community college debt distance learning documents for FAFSA education education tax credits engineering scholarship essay contests essay scholarships expected family contribution FAFSA federal student loans financial aid financial aid application free money for college GI Bill Grants hispanic scholarships minority scholarships Pell Grant Pell Grants private student loans reduce cost of college saving for college scholarship scholarship applications scholarship essays Scholarships Scholarships & Grants scholarships for college student financial aid student loan student loan consolidation student loan debt Student Loans Info tuition work study

Footer

About FinancialAidFinder
Contact Us
Privacy Policy
Cookie Policy

Scholarship Submissions

If you offer a college scholarship, you can submit it to us through this form:

Scholarship Submission Form

Copyright © 2021 · FinancialAidFinder - All rights reserved.