Gain control of your student loan payments

Learn ways to successfully manage your loans.

February 14, 2018 - Author: Terry Clark-Jones, Michigan State University Extension

Many people across the United States are struggling to pay back their student loans. According to the Financial Industry Regulatory Authority (FINRA) and the Federal Reserve, there are over 42 million people with student loan debt with an average debt of $32,731.

The good news is there are a number of repayment options that are available. Whether you have started paying back your student loans or are about to begin, here are three things you should do.

  1. Make a list of the type of student loans you owe. There are two categories of student loans: federal and private student loans. If your loans are backed by Federal Department of Education and click on the link to find the list of your student loans and their servicer. You will have a number of repayment options available to you. If you have private student loans, your options will be limited. The Department of Education website is a great place to start to learn about the many affordable options available to pay back your student loans. With your private student loans, you will need to contact the servicers of those loans to see what options are available. Consolidation of student loans is another option. Often this may give you the opportunity to lower the interest rate. There are pros and cons to consolidation of your student loans so make sure to explore all options.
  2. Understand what you can afford to pay towards your student loans each month. General guidelines suggest keeping payments to no more than 10 to 12 percent of your monthly income. If your income is low and you cannot make your current monthly payments, here are a few tips to avoid defaulting.
      • Contact your lender: This should be the first action you take when you are not able to make a payment. They will provide you with some options and they appreciate the fact that you are being proactive on your situation.
      • Enroll in repayment option programs: Take advantage of the many repayment options that will decrease your monthly student loan payments that make them more affordable. There are many options available for federally backed loans. There are fewer options with private student loans. Do not let this stop you from calling your servicer to learn about your options.
      • Manage the cost and long-term consequences: Once you have set up a manageable repayment plan, consider other helpful options like auto-pay, consolidation and paying down the least expense loans first. All of these steps will assist in saving on the interest cost of your loans.
  •  Deal with loans that are in deferment, forbearance and/or default. Missing payments are damaging your credit. The interest on your loans are accumulates and adds to your debt. Deferment and forbearance or only short-term solutions. It is extremely important that you find a solution to fulfilling your obligation of paying back your student loans. It is better to confront the situation then to ignore. The Department of Education also has available loan rehabilitation and loan forgiveness programs as additional options.


Your student loans will not go away. By following these actions, you can gain control of your student loans.


This article was published by Michigan State University Extension. For more information, visit To have a digest of information delivered straight to your email inbox, visit To contact an expert in your area, visit, or call 888-MSUE4MI (888-678-3464).

Tags: business, economic development, money management, msu extension

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