- Understand your rights and responsibilities regarding your repayment obligation as well as your repayment options.
- Borrow for college expenses only. Borrow only the amount you need and only what you can reasonably expect to be able to repay.
- Keep all records regarding your loan. Make copies of all letters, canceled checks and any documents you sign.
- Notify your lender or servicer when you have a change of address, phone number, or name. Also notify your lender or servicer if you change schools or your enrollment status changes.
- Seek help as early as possible if you have any difficulty maintaining your student loan repayment arrangement.
- Talk to your lender or student loan guarantor if you have any questions about the particular terms of your loan.
- Keep credit card debt to a minimum or avoid credit card debt completely.
- Create and maintain a budget that is within your monthly income.
- Consider making nominal loan payments while in school. This will reduce the amount you owe after graduation.
Loan Default Prevention
A student loan will go into default when you fail to make payments and your account is 270 days delinquent. Once the loan is considered in default, the entire balance (principal, interest and collection fees) is immediately due and payable. 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 can all take action to recover the money you owe.