Managing Student Loans

It is important to keep track of what loans you have borrowed, who your lender is, who is servicing your loan, and what the interest rates and repayment requirements are.

Student loan servicers are companies that manage your student loan while in repayment. They manage billing, process your payments, help you choose repayment plans, help you understand any repayment benefits you may be eligible for, and maintain your student loan account records. Your loan servicer should be your first source of help.

Federal Student Loan Servicers

The U.S. Department of Education is the lender for all federal student loans, but your loan is managed by a federal student loan servicer.

Occasionally, the Department of Education may transfer your loan to a different servicer. If this occurs, the terms of your loan do not change—only the company that manages your account may change. You will receive an email or letter from your current servicer notifying you of the transfer, and a welcome letter from your new servicer with their contact information and informing you of any actions that you may need to take.

To find your federal student loan servicer, log in to your account at StudentAid.gov using your FSA ID. Your My Aid dashboard will list each of your federal student loans, your current loan servicer, your outstanding balances, and the servicer’s contact information. If you need assistance, you may also contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).

Private Student Loan Servicers

Your private education loan lender can provide you with information on your education loans and tell you who is servicing it. Your lender will notify you when your loan is first assigned to a servicer and if your servicer changes.

Private education loans may also be sold to another lender or investor. If your loan is sold, the owner of the loan changes, but the terms and conditions of your loan do not. You will be notified if the ownership of your loan changes, although your servicer may remain the same.

Entering repayment for the first time can feel overwhelming, but by taking a few simple steps it can help you stay on track and avoid unnecessary costs and stress.

Create Your Account

Your first step is to create an online account with your loan servicer so you can view your loan information, make or schedule payments, enroll in auto pay, update your contact information, and receive important notices electronically.

If you have a private student loan, your lender can help you find your servicer.

If you have a federal student loan, log in to your account at StudentAid.gov using your FSA ID and follow the link “My Aid.”

Choose a Repayment Plan

Federal student loans offer several repayment options set by the government. Private education loans may have more than one repayment option—it will be dependent upon the lender and the loan product you have.

To help you understand your options and choose the repayment plan that best fits your budget, financial goals, and circumstances, contact your loan servicer. Do this early so that you have time to prepare to make your first payment on time.

Federal student loan borrowers can learn more about available repayment plans at StudentAid.gov. Federal Student Aid has a great tool called the Repayment Calculator that will estimate your monthly student loan payment and help you to select a repayment option. It can also help you decide whether to consolidate your loans or change repayment plans.

Helpful Tips for Successful Repayment

• Know when your first payment is due. Do not wait for the first bill—log into your account on your servicer’s website to confirm your payment due date and balance in advance. This will give you time to choose a repayment plan, prepare, and save for your loan payment.
• Consider enrolling in Auto Pay to automatically deduct your loan payment from your bank account when it is due. This not only helps you make your payments on time, but most private lenders, and the Department of Education will offer an interest rate reduction on eligible loans. Check with your loan servicer.
• Make your payments on time. This helps to build a positive credit history, avoids late fees and collection costs, and it may keep you eligible for other repayment benefits that may be available to you.
• If you cannot afford your payment, do not ignore your student loans. Contact your servicer as soon as possible. You may be eligible for certain benefits such as a different repayment plan, a temporary cessation of payments (deferment or forbearance), or other repayment help.
• Keep your contact information current so you do not miss any important notices from your servicer.
• Know what benefits are available to you. There are some specific circumstances in which you could have your federal student loan debt reduced or eliminated. Review the available federal forgiveness and cancellation programs to see if you may qualify.
• Keep track of your balances, repayment status, and loan servicers.

The best way to successfully repay your student loans, whether federal or private, is to stay informed of your benefits and options, make your payments on time, and promptly contact your servicer if you need help. Your loan servicer is there to help you understand your options and find a repayment plan that works for your situation.

Common Mistakes to Avoid

• Ignoring bills, emails, or phone calls from your loan servicer.
• Missing your first payment.
• Waiting until you have missed payments to ask your servicer for help.
• Not updating your contact information with your servicer.
• Assuming that all repayment plans are the same and that your servicer will not work with you if you need help.

These are common mistakes borrowers make that lead to student loan repayment problems and can be avoided by staying in contact with your loan servicer.

There are many illegal "debt relief" scam companies that contact students and borrowers and offer help with their student loan debt. These companies will charge you a significant amount of money to do what your federal loan servicer does for free. Do not work with these companies.

Be cautious of any company that charges upfront fees, promises immediate loan forgiveness or debt elimination, claims to have special access to federal repayment or forgiveness programs, asks for your FSA ID username or password, or pressures you to act immediately.

If you receive suspicious communications, do not share personal information or make payments. Verify the source and contact your federal loan servicer directly for assistance.

For more information about financial aid fraud or to report fraud, contact the Federal Trade Commission and the Consumer Financial Protection Bureau.

For more details and tips on avoiding student aid scams, visit these resources: Federal Student Aid: Avoiding Student Aid Scams and CFPB: What Are Some Common Types of Scams.

Many borrowers may leave college with multiple student loans, sometimes from different lenders and/or loan programs. As a result, they may have several monthly payments, different repayment schedules, and more than one loan servicer to manage.

Depending on the types of loans you have and your financial goals, you may be able to simplify repayment by combining your loans or replacing them with a new loan. Options such as a federal Direct Consolidation Loan or a private student loan refinancing may allow you to reduce the number of monthly payments and make managing your student loan debt easier. Each option has different eligibility requirements, benefits, and considerations, so it is important to understand how they work before deciding which is right for you.

A Federal Direct Consolidation Loan allows a borrower to combine one or more eligible federal education loans into a new single federal Direct Consolidation loan with a single monthly payment. Your old federal student loans are paid off by the new federal Direct Consolidation loan. This does not reduce the amount you borrowed, and the new interest rate is fixed equal to the weighted average of the interest rates on the loans being consolidated rounded up, so it generally does not reduce your interest rate, but it can help manage your federal debt.

Benefits of consolidation include:

• You will have one monthly payment. Choosing a longer repayment term could reduce your monthly payment, but keep in mind that it could also increase the total interest paid over the life of the loan.
• Borrowers of older Family Federal Education Loans and federal Perkins loans can gain access to some benefits, including certain repayment plans, which are only available in the federal Direct loan program.
• It can be a valuable tool to help bring defaulted federal student loans back into good standing.

More information on federal Direct Consolidation loans is available at StudentAid.gov.

A Private Education Refinancing Loan allows you to replace one or more eligible existing student loans (private and federal) with a new private education refinance loan that may offer a different interest rate, repayment options, and terms and conditions. The loans are made by a private lender with approval and interest rates based on your credit profile. Borrowers with strong credit profiles, or those that apply with a creditworthy cosigner, may qualify for a lower interest rate and more favorable terms. The new refinance loan pays off the original loans and any benefits, rates, and terms that you had on your existing loan(s) are replaced by the terms, benefits, and rates of the new loan.

Benefits of refinancing may include:

• Lower interest rate.
• Reduced monthly payment by extending the repayment term, but keep in mind that it could also increase the total interest paid over the life of the loan.
• Pay off your loans more quickly by shortening your repayment term, which would decrease the total interest paid over the life of the loan.
• Combine multiple student loans into one new loan with a single monthly payment.

Be careful about refinancing your federal student loans into a private loan. If you refinance a federal student loan, you will permanently lose all federal benefits, including repayment plans, loan forgiveness and cancellation programs, and certain deferment and forbearance options.

Helpful Tips

• Utilize online calculators that many lenders have on their websites. These will help you to determine how much you might be able to save by refinancing.
• Keep in mind that the terms and conditions including benefits and protections of the underlying loans will be replaced by the new refinance loan. You should be aware of and consider those differences as it could provide for favorable changes or loss of benefits.
• Shop around. Compare offers from multiple lenders, including at least one nonprofit or state-based lender, before choosing a loan.
• Do not base your decision on the advertised minimum rate alone. Keep in mind that most lenders advertise attractive "as low as" interest rates, but your actual rate will depend on factors such as your credit profile (and, in some cases, your cosigner's credit). You can request a prequalification, which does not affect your credit score, to see the rate you will receive.
• Depending on your credit score and your income, you may need a cosigner. Even if a cosigner is not required, it is possible that having a cosigner will qualify you for a lower rate. Make sure that your cosigner understands that they are equally obligated as you are to pay back the loan.
• There may be fixed and variable interest rate options. Know what you are applying for and what rate you will receive.
• Use “best lender” lists from web and AI searches, shopping sites, and press articles with caution. A fee or commission is often paid by the lender to be listed and the rate advertised may not be the rate you will receive.

Consider Nonprofit and State-Based Loans

Many nonprofit and state-based lenders offer education refinance loans with low interest rates and favorable terms and conditions. These lenders prioritize affordability, transparency, and borrower protection over profit maximization and may save you thousands of dollars depending on your interest rate and repayment term.

Find a nonprofit refinancing loan.

If you are having problems with your student loan lender or servicer, you may reach out to a federal student loan ombudsman. This is a neutral party that helps to resolve serious disputes when a borrower and a lender or servicer cannot reach a resolution to a problem.

There are two primary federal resources that will help when a dispute or complaint occurs: Federal Student Aid (FSA) Ombudsman for federal loans, and Consumer Financial Protection Bureau (CFPB) Complaint Portal for both federal and private loans.

Additional Resources

CFPB - Find Advice for Your Student Loans: Offers guidance using basic information about your student loans.

Federal Student Aid - Repaying Your Student Loans: A guide with information about repaying federal student loans.