The understanding and management of Personal Finance and Student Loan Debt are financial literacy topics of particular importance to college students. See links below for articles, websites, and other resources that cover personal finance and student loan debt issues.
- Mapping Your Future
- Planning and Budgeting Calculator
- Nelnet’s Strategies to Save Money
- Nelnet’s Managing Your Money
For more information about financial literacy, please review the default prevention plan – What every student borrower needs to know.
Financial Aid Default Prevention and Management Plan
What Every Student Borrower Needs to Know
Before you borrow please read this. If you have already borrowed on a student loan pay particular attention to this Q&A as it will provide valuable information and hopefully keep you out of any legal issue’s concerning your student loan. This Q&A will help answer most of your questions and give you resources to assist you while in school, during a leave of absence/withdrawal, and after completion of your program.
We strongly encourage borrowers to carefully weigh the need for loans and to borrow only what is actually needed. We encourage you to estimate and plan your repayment obligations prior to borrowing. Borrowing in excess of what is actually needed means you must repay more at a later date. Your monthly payments will be higher and you may be paying over a longer period of time due to the interest that accrues on your loans.
For federal student and parent loans, borrowers should be aware of the repayment options that are available. In addition, there are a number of deferment or forbearance provisions available once the loan is in repayment. For some qualifying majors and professions, such as teaching, federal and state loan cancellation provisions can also be beneficial.
Click here For estimate, repayment, deferment and forbearance options.
Click here For Loan Forgiveness Program Information.
Remember, loans must be repaid even if you did not complete your program and/or degree.
How do I track and manage my loans?
To keep track of your student loans or to contact your loan servicer for repayment, log onto to the National Student Loan Data System (NSLDS) at www.nslds.ed.gov or call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243; TTY 1-800-730-8913). The PIN number that you used as your electronic signature for the FAFSA can also be used to gain access to NSLDS.
This website will not only show you all of the federal and private loans you borrowed, but also who the servicer is for your loan(s). The servicer is the entity you will be corresponding with to coordinate repayment.
To see a list of Federal Student Aid servicers for the Direct Loan Program and for FFEL Program Loans purchased by the U.S. Department of Education, go to the Loan Servicer page.
If you have borrowed loans in the past through the FFEL Program (i.e. a federal loan serviced by Bank of America, Wells Fargo, Citibank, etc.) these loans have most likely been sold to a third party processor. We cannot stress enough how important it is to know your loan servicer. Please refer to “Understanding the PUT Program” under the loan consolidation section.
How do I consolidate my loans?
If you are expecting to borrow a Federal Stafford or Federal PLUS Loan for this coming year and also have a Federal Family Educational Loan, Stafford or PLUS Loans from prior years, you will have at least two lenders to repay when you graduate: your selected private lender and the federal government.
The Direct Lending Consolidation program offers a way for you to combine both loans into one consolidation loan with one point of repayment. This loan consolidation program will be available to you once you graduate and begin thinking about repayment.
There are advantages and disadvantages to loan consolidation and we recommend that you research this option carefully before proceeding. If you have questions about whether or not consolidation is right for you, please contact the Direct Loan Consolidation Loan Information Center at www.loanconsolidation.ed.gov.
Who is eligible for loan consolidation?
To qualify for a Direct Consolidation Loan, borrowers must have at least one Direct Loan or Federal Family Education Loan (FFEL) that is in grace, repayment, deferment or default status. Loans that are in an in-school status cannot be included in a Direct Consolidation Loan.
What is PUT program?
Since 2008 Stafford lenders have sold some of their loans to the Department of Education in an attempt to build liquidity in the market and provide more loans to students. This is called the Loan Purchase Commitment (PUT) Program.
As a result, continuing students may have already received communication from the Department of Education explaining the purchase. These loans are not considered Direct Loans but continue to be part of the Federal Family Education Loan Program (FFELP).
It is important to note that loans borrowed in the future may not have the servicer as loans you have borrowed already. This means that when you begin to make payments on your loans after graduation you may be making multiple payments to multiple entities.
How do I repay my student loans?
Your loan servicer will provide information about repayment and will notify you of the date your loan repayment begins. It is very important that you make your full loan payment on time either monthly (which is usually when you’ll pay) or according to your repayment schedule.
If you don’t, you could end up in default, which has serious consequences (see What is Loan Default?). Student loans are real loans—just as real as car loans or mortgages. You have to pay back your student loans.
Can you repay your loans while in school? Yes! Contact your loan servicer through www.nslds.ed.gov.
When should I begin repaying my loans?
After borrowers graduate, leave school, or drop below half-time enrollment, loans that were made for that period of study have several months before payments are due. This is called the “grace period”.
Grace periods extends to 6 months after borrowers leave school or ceases to be enrolled in at least half time enrollment for 6 months. Grace periods can also extend up to 12 months; however, you must contact your loan servicer directly.
During the grace period, no interest accrues on subsidized loans. Interest accrues on unsubsidized loans during grace periods, and this interest is capitalized when borrowers enter repayment.
Borrower repayment period begins the day after their loan grace period ends. First payment will be due within 60 days after the repayment period begin.
Each loan has only one grace period. If borrowers return to school after the grace period has expired, the borrower qualifies for deferment while borrowers are enrolled but return to repayment after borrower leave school. There is no additional grace period.
You are able to make payments on your student loan while you are still enrolled. If you have unsubsidized loans, you are able to make payments on your interest that is accruing.
What repayment plans are available to me?
When it comes time to start repaying your student loan(s), you can select a repayment plan that’s right for your financial situation. Generally, you’ll have from 10 to 25 years to repay your loan, depending on which repayment plan you choose.
What is loan default?
Loan default is failure to repay a loan according to terms of the Master Promissory Note. There can be serious legal consequences for student loan defaulters.
There are different options to prevent falling into default status.
The following are some options:
What if I default on my loan?
If you default, it means you failed to make payments on your student loan according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan. In other words, you failed to make your loan payments as scheduled. Your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government all can take action to recover the money you owe.
How do I get help with my loan problems?
If you are having a problem with your federal student loan, contact the FSA Ombudsman at the US Department of Education. The FSA Ombudsman is dedicated to helping students resolve disputes and other problems with federal student loans.
The FSA Ombudsman will research your problem in an impartial and objective manner and will try to develop a fair solution. The FSA Ombudsman does not have the authority to impose a solution. Nevertheless, many students have found the FSA Ombudsman to be helpful in resolving disputes with lenders.
You can contact the FSA Ombudsman by phone at 1-877-557-2575, by fax at 1-202-275-0549, by mail at:
For more information and to learn what actions to take if you default on your loans see the Department of Education’s Default Resolution Group Web site.
School of Career Education is committed to helping you be successful while in school, after you have graduated, or while taking time off of school. We understand finding a job or maintaining employment in our given economy can be difficult as well as managing your student loans.
Important: Remember, you are responsible to repay your student loans as agreed on your signed Master Promissory Note(s). Please keep your contact information up to date with your loan servicer to ensure you receive important correspondence.
When in doubt, contact your loan servicer. Staying in touch with your loan servicer will maintain a good relationship and decrease the chances of loan default.
What if I need legal help?
If you are seeking legal representation, please read more information on Consumer Financial Protection Bureau.