Student Loan Survival Guide

Drowning in student loans? Save yourself from debt using our simple step-by-step plan.

consolidate should be contingent on many factors” such as debt-to-credit ratio, the amount of available credit, income, and changes in financial circumstances.

Students who have several types of loans from several sources, such as the Department of Education, Sallie Mae, and Nelnet, may be encouraged to consolidate to simplify payments. However, students who have few loans from one source may be discouraged from consolidation, says Derek Kindle, a financial aid officer at Howard.

THINK AHEAD. While borrowers have many options when preparing to repay loans, Johnson says students should start thinking about how they will pay even before they apply for their first loan.

“Really budget your educational costs before taking out student loans. Many students decide to take out loans before fully exploring available grants and scholarships. Each year, billions of dollars in scholarships from various sources go unspent because of the lack of applicants,” Johnson says. “Students and parents who take the time to make realistic college budgets and payment plans will usually find innovative ways to pay for college without taking out huge amounts in loans.”

But for those who have to take out loans, Korsvall says the debt is considered “good debt.” “We always consider student loans to be good debt versus bad debt because of what they offer—very competitive interest rates, deferment and forbearance, and the flexible repayment options.”

Resources for Borrowers

  • To help students and their families understand their rights, responsibilities, and repayment options, federal student loan borrowers are required to undergo entrance counseling when they enter school and exit counseling before graduation, says Chris Greene, spokesman for the U.S. Department of Education.
  • Students with questions that cannot be addressed by college officials should contact their lender or the Department of Education at 800-4FED-AID or visit
  • If a borrower defaults on a student loan, he or she should visit .html, the Federal Student Aid Collections Website, for tips on Federal Family Education Loans, Direct Loans, Federal Perkins Loans, Federal Pell Grants, and Federal Supplemental Educational Opportunity Grants.
  • If you want to set up a monthly payment plan on your defaulted loan, contact the Department of Education’s customer service center at 800-621-3115.
  • If you have damaged your credit because of a defaulted loan, you must complete a loan rehabilitation program, which requires you to make 12 consecutive payments at a reasonable rate. Once you have made the payments, the loan will be rehabilitated and it will be taken out of default. Information about this program can be found at
  • Defaulted loan payments should be mailed to: National Payment Center, P.O. Box 4169, Greenville, TX 75403-4169.
  • Information about consolidating loans can be found at
  • Other information about student loans and payment options can be found at Sallie Mae by visiting From the Website, you can apply for a loan, manage existing loans, and search for jobs through TrueCareers.
  • Sallie Mae also offers a hotline for anyone with questions about their loan. The number is 800-448-3533 and
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