How to Avoid Defaulting On Student Loans: Money 101

Debt is one of those ugly four-letter words that no one wants to deal with. And yet, millions of Americans seem to survive on debt. One of the most common forms is, of course, student debt. How many people could really afford a college education out-of-pocket?

The answer is very few. And that is why so many people are in massive amounts of student loan debt – wondering how to keep from defaulting on student loans. This guide is designed to help answer that question.

What Happens When Defaulting On Student Loans

Defaulting on student loans does more than add the stress of knowing you’re in debt. There are actually some pretty serious consequences. One of these is losing access to some programs that help, such as income-driven repayment plans and even loan forgiveness. While some loan service providers will work with you to get back on track, getting off track in the first place is risky, as you might not get the help you need.

Another potential problem is the actual collection methods. First and foremost, you have to understand that your interest is constantly accruing. And when you’re in default, collection fees are added that can be as high as 25 percent of both the loan principal and the interest.

These fees added to your loan balance can lead to some hefty payments. And if you can’t make them, you risk having your wages, income tax returns, and more garnished. I know someone who dealt with this, and she had an incredibly hard time paying her regular bills for years due to these garnishments.

And, of course, you have to remember that your student loans are reported to the credit bureaus. If you’re not paying and you go into default, it can impact your ability to get a loan for a home, vehicle, or just to get some breathing room to pay your bills. If you do manage to get a loan, you’re likely going to pay high interest rates.

If you don’t pay your student loans or work with your loan service provider, you go into default. And, if you go into default, any money coming your way can be garnished. If you have to get another loan, you pay out more in interest than you normally would. Bottom line: going into default on your student loans can cost you more than the payment itself.

So it is vital that you don’t default. I know that this can be easier said than done, which is why the following section will walk you through how to make sure you don’t.

How to Avoid Defaulting On Your Loans

Again, this is where we’ll talk about ways for you to stay out of default from the beginning to the end of your loan term. However, there are also some tips below to help you get out of default if you’re already there or on the brink.

Start Before You Sign the Line

The best way to avoid defaulting on your loans is to start before you ever even sign your loan paperwork. Take a good look at that paperwork and gather all of the necessary information, such as the interest rate, when your loan is due, what exactly happens if you miss a payment, and so on.

Next, take some time to think about other options. This can, of course, include other loan options. Gather information on several different loans and compare the terms.

Also, consider other ways to pay for your education. Grants and scholarships are available for people of all ages, occupations, genders, races, and more. If you do the research, you’re bound to find one or more that you can take advantage of. Every dollar you can get for free to help pay for your education is a dollar you don’t have to repay. So, whether it’s a $200 grant or a $10,000 scholarship, it’s worth the effort to apply.

Don’t forget that you can also pay cash for your education – and you don’t have to do it all at once. You can pay for a few credits at a time if you need to. This path might take a little longer to complete your program, but you won’t be graduating with debt, so it’s definitely worth considering.

If you like the idea of paying cash but don’t want to wait forever to graduate, take a look at other schools and compare the costs. Look into online programs or determine if a certificate program would be enough for your career goals. And you can split the cost of your program by paying cash for one or two classes a semester and getting loans for the others. Anything you can pay in cash means less debt when you graduate.

Take the Least Amount

If you’ve decided to go with loans, that’s okay. There’s still a way to save. When you apply for loans, they’ll typically offer you the maximum amount you qualify for. What most people don’t realize, however, is that they don’t always need that much for their schooling.

Instead, they’ll often get quite a bit back as a stipend. Some people use it to pay for a laptop or internet service. Some spend it on things they want. In either case, it’s money you don’t necessarily need. So, when you agree to a loan, ask for the minimum amount you need. This alone will make a big difference to the amount you owe at the end of your degree program.

Know Your Agreement

Your next step after taking out loans is to know the terms of your agreement – front, back, and sideways. Read over your paperwork several times until you understand fully what is expected of you, when you need to make your payments, how you need to set those payments up or make them manually, and so on. And be sure you understand exactly when and how interest accrues as well as what actions the loan provider will take if you miss a payment.

Understand, also, that most loans don’t come due until after you’ve graduated. However, others do. You need to know now which type of loan you have.

Make a Plan and a Budget

Alright, you know the terms of your agreement. Now, it’s time to make a plan to carry out that agreement. That starts by adding your payments to your budget. If you happen not to have a budget yet, it’s time to start one. Take advantage of the Budgetry store in the Goalry Mall to help you create and implement a budget that will keep you on track.

After adding your payments to your budget, you need to make sure you have the funds to cover them. Do some calculations to determine if there’s already enough money in your income to make those payments. If not, you’ll need to find a way to squeeze them in. This might be through cutting down on your coffee shop runs, picking up extra shifts at work, or being more careful with your grocery shopping. In either case, it’s time to determine where exactly your loan payments are going to come from, and commit to putting that money towards your loans.

Keep Up Online

Most loan service providers allow you online access to everything pertaining to your loans. Take advantage of this, as it can help you keep up with payments, access repayment options, and much more.

Defaulting on Student Loans – What to do?

While the steps above can definitely help prevent defaulting, we all know that things can go wrong. Sickness can keep you out of work. Your vehicle might decide it’s time to break down. In any event, stuff happens. Life throws curveballs, and it can throw you off track. So how do you keep from defaulting in those cases? The following tips can help.

Determine the Problem

First of all, you have to figure out what the problem actually is. Is it that your loan payments are due at the same time of the month that everything else is due? Do you just not bring in enough to cover the payments? Are there more unexpected expenses popping up than ever before and you simply don’t have enough savings to cover them?

Whatever the reason you’re having trouble making your payments, write it down. In some cases, you might be able to fix the problem simply by revisiting your budget, cutting down in some other areas, or being more vigilant with things like car maintenance. However, if you’re having an ongoing struggle to pay your loan payments, the following tips can help.

Communicate with Your Loan Provider

One of the first steps to take is to communicate with your loan service provider. Believe it or not, most people are willing to help you as much as they can. And collection methods cost money, so they’d much rather find a way to work with you than have to pay to collect their money. Call your provider, discuss the situation, and find out what options they have to help.

Look At Repayment Plans and Other Options

When you’re having a hard time paying because you don’t have enough income, there are a few ways to address this. Consider ways to make some extra cash, like a side hustle or working a few extra hours a month. You might dig into blogging, selling printables, or other ways to make side cash without spending too much time doing so.

Another option is to look into Income-Driven Repayment options. These base your payment amount on your income and can significantly decrease your monthly payment. In fact, if your income is low enough, it might just take your payments down to zero.

Please understand, though, that this doesn’t make your loans go away. It will actually increase the length of time you owe them. So if you need an income-driven repayment plan, take advantage of it. However, while you do, try to formulate a way that you can start paying your loan payments in full so that you’re not paying for them until past retirement.

Getting Out of Default

What happens if you’ve already defaulted on your loans? Well, you’re probably overwhelmed and afraid of what’s going to happen, but take a breath. You can still get out of this with some commitment and work.

Do An Assessment

Just like handling mishaps, the first step should be understanding what went wrong. What situations caused you to default? Are the payments too high? Did you lose a job? Did you miss work due to a death in the family? Write down everything you can think of that went wrong so you can take the necessary steps to address it.

Talk to Your Loan Service Provider

This should be your next step. Depending on the reason you defaulted, there are often programs available to help. For example, some providers offer help if you’ve suffered a job loss, medical issue, or loss of a loved one. However, you might not find out about any of these programs until you communicate with them.

There are also options like loan consolidation and loan rehabilitation. Loan consolidation means that you pay off all or a portion of your student loans by taking out a new loan. This can be helpful for some people, especially if they are able to get lower interest rates or more favorable terms.

Loan rehabilitation is a program through which your loan service provider agrees to accept “reasonable” payments for a set period of time, and then your loans come out of default status. Typically, “reasonable” payments mean they calculate 15 percent of your annual discretionary income, divide it by 12, and then accept that amount for around nine months.

After talking to your provider, you will get a better idea of what’s available to you and how it might help. Be sure to compare all the options provided so that you can make the best choice.

Look Into Other Loans

Let me start this by saying that this is not the best choice for everyone because you’ll not always find a loan that matches your needs. However, it is a good option to consider and look into. All you need to do is determine what – if any – personal loans you might get approved for. Compare their terms and interest rates with those of your student loans. If the terms and interest rates are better, consider applying for those loans and pay off your student debt.


Defaulting on student loans can lead to many problems, but it can be challenging to prevent it from happening. Remember the old saying, “Where there’s a will, there’s a way.” This saying is true, but it can take some time and dedication to find that way. Still, take heart. Remember, you’re not the only one fighting this battle, and even in the toughest times, it’s a battle you can win.


What You Need to Know About FAFSA

What You Need to Know About FAFSA

Completing the Free Application for Federal Student Aid is essential for those pursuing university studies in the United States. It can be stressful to complete this form for those who are not adequately informed. There are numerous things to know when it comes to the Free Application for Federal Student Aid (FAFSA). The more informed you are, the less stressed you’ll be when completing this step toward becoming a college student.

Do your research now so that you enjoy confidence when filling out your FAFSA. The following is a list of what you need to know about the Free Application for Federal Student Aid.

How to Get the FAFSA Form

There are numerous ways to acquire and submit your FAFSA form. Unlike in the past, you don’t have to send in your application form by mail these days. These days, students can submit their FAFSA both online and by mail. Your university can provide you with your FAFSA from. You can most likely pick up your FAFSA form at the admissions office of your university.

You can also download your FAFSA form online. In this case, you’ll have to mail in your form after filling it out. You can find the FAFSA form on the website. You can also access the application form via the Apple App Store or Google Play.

If you want to submit your FAFSA form online, you will need to create an FSA ID. Creating an FSA ID and submitting you FAFSA online might be the best option. If you handle things online, you should get the fastest possible response to your FAFSA filing.


The Goals of Filing Your FAFSA

The basic goal of filing your FAFSA is to find out how you can pay for college. You might not necessarily get your entire tuition bill covered through your FAFSA filing. However, it’s important to note that most students can find ways to pay for even the most expensive universities after filing their FAFSA. You’re obviously going to want to pay your tuition bill through grants as much as possible. However, this is not the only possibility.

In addition to providing you with information about grants, your FAFSA can also provide you with information on work-study programs. Through these programs, you can become employed through your university. You’ll get paid for the work you do. You can use the money you earn to pay your tuition. You can also use your pay to cover your living expenses during college.

Another goal of your FAFSA filing is finding out about loans for which you are eligible. Even if you are not eligible for grants or work-study funding, you should be able to borrow the money you need. One great thing about college loans through your FAFSA is that you don’t need to meet credit history requirements. You can borrow money to pay for school even if you have poor credit.

FAFSA Deadlines for Filing and Submission

There are a few dates that you need to be aware of when it comes to your FAFSA filing. The deadline for FAFSA submission is by June 30. Another deadline you should consider is the priority deadline. The priority deadline for the FAFSA can vary depending on the year. Submitting by the priority deadline can make you eligible for more college funding.

The period during which you can submit your FAFSA can also vary by year. It’s important to stay posted on any updates regarding these dates. You can check out federal, college and state FAFSA deadlines

What You Need to Fill Out FAFSA Form

Filling out your FAFSA will be much easier if you compile all information you need beforehand. There’s a lot of information you have to provide to complete your form. One basic detail you need is your social security number. Those who are not citizens of the US but wish to study at an American university need to submit their alien registration number.

Income is a key detail when it comes to FAFSA submissions. You need to provide information on the income you’ve had in previous years. You also need to provide information on the income of your parents if you are still a dependent.

If you have any investments, you may need to provide details on these investments. Another important factor on your FAFSA is your savings. You may need to provide details of the amount of money you have in savings when you fill out your FAFSA.

FAFSA official list:

  • Your Social Security Number
  • If you are not a U.S. citizen, your Alien Registration Number
  • Your federal income tax returns, W-2s, and other records of money earned. (Note: You may be able to transfer your federal tax return information into your FAFSA using the IRS Data Retrieval Tool.)
  • Bank statements and records of investments (if applicable)
  • Records of untaxed income (if applicable)
  • An FSA ID to sign electronically.

When Will You Get a Response

Obviously, you’re going to be eager to get back results after submitting your FAFSA. Funding your college education is obviously an expensive proposition. You want to figure out the financial details as soon as possible. You might be surprised at how quickly you get a response back. These days, those who submit their FAFSA online can get a response back after only three days have gone by. In most cases, you should get a response back within five days.

If you submit your FAFSA by mail, things might take a little longer. However, you should still get a response back fairly soon. Those who submit their FAFSA by mail should have their application processed within ten days.

Regardless of whether you file online or by mail, you’ll receive a Student Aid Report (SAR) back from the Federal Student Aid Office. This form will summarize all the details on your FAFSA. It’s important to review your SAR for accuracy. This form will tell you how much you will be expected to contribute to funding your university studies. It will also include details on your eligibility for Pell Grants and student loans.

Don’t Forget to Include All Colleges at Which You May Enroll

You’ll have to provide information on all the universities that you may be enrolling in on your FAFSA. This is important. Your SAR will be sent to these various universities once your FAFSA is processed. If you submit your FAFSA early, you should list all the universities you’re applying to.

After your FAFSA is processed, individual universities will process your SAR. When this is done, the colleges you’re interested in can determine award packages they can offer you. However, you may need to get in touch with the financial aid office at the universities you’ve applied to before this is done.

Can You Edit Your FAFSA?

Making sure your FAFSA information is correct is important. You don’t want to have to make edits to your FAFSA after you submit it. While you can edit your FAFSA, doing so can create delays. You can make some minor edits like changing the colleges listed on your FAFSA. You can also make edits to your mailing address. However, you can’t make any changes to key entries like your social security number after you’ve submitted your FAFSA.

The Benefits of Filing Your FAFSA

Filing your FAFSA can benefit you in numerous ways. Of course, the number one way it benefits you is by finding you funding for college from the federal government. However, this is not the only way it benefits you.

Filing your FAFSA can help you summarize your financial details before beginning college. Filing your FAFSA can also help you to learn about opportunities for scholarships and financial aid on the state level. It also guarantees you that you’re taking advantage of financial resources available to you.

If you don’t file your FAFSA, you’ll always wonder if there was a grant or loan out there that could have made your college years less stressful and more financially secure.

Final Thoughts

This information should help you get through the process of filling out and submitting your FAFSA. The outcome of your FAFSA submission has a big impact on your finances as a college student. That’s why it’s so important to fill out and submit this form properly.

Make sure that you’re aware of the deadline you need to meet before you get started. Again, you have until June 30th to file your form as of 2022. However, you may get more financial assistance if you file as early as possible. You should also avoid making the mistake of not filing your FAFSA. You should definitely submit your FAFSA even if you think you won’t be eligible for any financial assistance.

Chances are, you’ll be eligible for considerable assistance regarding funds for your university studies. Even if you are not eligible for grant money, you should be able to benefit from loans.

Although university isn’t free in the US, there are plenty of ways to pay for a degree at an excellent American university. Submit your FAFSA today and get started pursuing your academic goals!


How Applying for a Student Loan Feels Different These Days

Mini graduation cap on rolled up cash.

Parents and students will agree that there’s an increased sense of uncertainty today when it comes to pursuing higher education plans. Even those who have set aside college funds for their children might now be dealing with unemployment, and so now must seriously look into available higher education loan opportunities.

Different kinds of financial aid, from scholarships to loans, can be sought out to help students increase their chances of securing funds to secure their educational future. As with any other types of loans, there’s going to be a stringent application process you’ll need to get through first before approval. To apply for a student loan, forms will need to be filled up, and requirements will need to be sent. In other words, there’s a lot of information gathering and data collecting that will occur.

Student Loans Then and Now

Before diving into those specifics, let’s first take a look at what you can expect in today’s student loan landscape. Perhaps the first thing you need to know about student loans is that you’re not the only one interested in applying for it. As a matter of fact, there is over $1.64 trillion worth of student loan debt in 2019, $1.515 trillion of which come in the form of federal loans, while the other $124.65 billion comes from private funding, according to the December 2019 data from the Department of Education.

These numbers are staggering. And give you an idea of just how much clamor there is for it in the country. And these numbers keep growing every year.

Did you know that the total student loan debt in the United States was at around $1.77 trillion in 2022?

We were still only dealing with billions back then, and now it’s in trillions. It only took a full decade to double that amount in billions to trillions today! Can you imagine how much more it’s going to be in the next decade?

The Rise in Student Loans

As more people seek out higher education, whether in college or post-graduate studies, the more student loan opportunities—and rates—go higher. There are a variety of reasons for this.

One is that the cost of schooling itself increases every year. Colleges and universities may justify these tuition fee increases with improvements in faculty, facilities, and curriculum. Of course, they would want to reassure you that you’ll be getting your money’s worth if you do decide to come to their institution.

Whether or not that promise of the return of investment in your education is actually fulfilled is another thing altogether. So give that some heavy thought: there is no guarantee that your diploma will be able to help you land a good job, right out of the gate, that can easily pay for your student loans, and then some. At the very least, however, it should help increase your chances significantly, so never question the value of a college degree.

Another thing you should know before you apply for a student loan is that you can expect an average of $35,397 student loans per person. So if you’re planning to take out a loan, it would be great if you could also have a reasonable expectation of where you’re going to get funding to repay the loan. After all, student loans aren’t simply offered on principal amount; there are interests and possibly other add-on rates that may be attached to it.

Simply put, it’s definitely a long-term commitment that you would do very well to prepare well for and take seriously.

Understandably, the idea of taking out a student loan today, especially in this very uncertain economic climate, is nerve-wracking. However, from then and now, student loans have proven to be a reliable option to help you pursue your life goals by way of completing your education.

How to Be Smart About Student Loans

Taking out student loans is a serious responsibility, yes. But with proper management, it is possible to prevent it from overwhelming your life or drowning you in debt for many years to come. Here are some of the first steps and considerations you need to take if you are planning to apply for a student loan.

Set A Budget

How can you set a budget when you don’t know how much loan amount will be offered to you? The answer is simple: list down your options for colleges and universities and see how much they cost. Doing this should give you an idea of the range of costs you should aim for when you take out a loan.

The cost of tuition will depend on how prestigious and exclusive the institution is. Ivy league schools are definitely going to require a lot more in terms of finances. Smaller private institutions, like art universities, also tend to be in the higher range of tuition costs because of the perception of exclusivity attached to it.

Other more “regular” colleges and universities may cost a little less. But don’t take it to mean that it’s going to be so much more affordable. Whichever option you take, it’s still going to cost a serious amount of money. You’re talking about funding for your entire four years (at the minimum!) of your degree, after all.

This is also why it’s crucial for you to think very hard about what course you’re pursuing before you apply for a student loan. Is this something that you could build and grow into as a serious career, or is this something more of an interest elevated to a higher level? How marketable are the skills that you can have in this degree you want to earn? What is the job market like upon your graduation? Does your area of study allow you to pivot to a different career path seamlessly in case you need to?

Make a Good Plan

We know, it’s definitely a lot to think about. But you have, because remember, once you take out the loan, it’s your responsibility to pay it back. Therefore, whatever it is that you’re using it for, you should at least try and make sure that your next steps in the future, upon graduation, are going to be helpful to you in bearing this responsibility.

As you’ve seen in today’s world, there is no guarantee for success, that much is true. But also, preparation really is key to make your future just a little bit more secure. So you don’t let financial obligations like student loans take over your life. At the very least, you can try.

It is highly advisable that in your search for the best-suited loan offer for your needs, you prepare the basic document requirements as well. You might also want to make duplicates of these documents, especially if you intend to make multiple applications.

Approaching Student Loans

Student loans can be terribly intimidating, we know that as much. The sheer amount of money involved in the conversation is enough to send a first-time student loaner tossing and turning at night.

When taking steps to apply for student loans, regardless if it’s your first time or not, it’s always good to take a comprehensive look at what awaits you in the deal. Know what are the moving parts in taking out a student loan.

The requirements for a student loan application will depend on what type of loan you are seeking out. At the most basic, however, you will need your social security details, proof of residency, and good credit standing. In some instances, you may be required to have a co-signer, such as your parents, especially if your credit history is not sufficient enough for a loan as big as a student loan.

How much money you will be offered rests on different standards. The lender might look at the school that you’re interested in, and compare that with how much of the costs you can actually afford to shoulder on your own. Family income, average living costs, outstanding loans, and credit history are among the basic information that the lenders will be most interested in.

Interest rates for student loans are compounding. This means that for every year you have an outstanding loan with your lending institution, the total cost of what you will pay them increases. Generally speaking, the sooner you pay off your student loan, the lower the interest rate you’ll have to deal with.

As a tip, don’t be lured in by easy promises of huge money to fund your education. Always read the fine print and make sure you’ve studied the terms and conditions before signing on the dotted line. If the process seems too easy and too good to be true, then that’s probably because it is.

That’s why you should really take the time to study your options and compare the different offers out there. If there’s one major change you can be grateful for a decade ago, it’s that information and fact-checking is a lot easier now, thanks to the internet. Put in the work for research so you can come up with a well-informed decision. Your future literally depends on it.

Ideally, this should be your first choice should you decide to take out a loan. That’s because federal loans tend to have good offers with lower and more reasonable terms. Plus, federal loans do allow for student loan forgiveness in the future, assuming that you meet their criteria.

What you have to remember about federal loans, however, is that the school will be the one to determine how much you should get. That, plus the fact that there is a cap on how much you can loan. Whether you get subsidized or unsubsidized loans.

Subsidized loans ease much of the financial burden on you because it is the Department of Education that pays for the interest of your loan for at least half the time you’re in school. They also will continue support for the first six months after your graduation, and then also during a deferment period.

This type of loan is specifically for parents who would like to support their dependent children in their students. Direct Plus Loans will require a credit check, and the offer will mostly depend on the parent’s credit history. The interest rates also tend to be a little bit higher than federal loans, although there are choices for repayment that can suit the needs of the borrower.

They will do a hard check on your credit history to verify your eligibility. And again might need to require a co-signer. You must clearly identify who the primary lender will be. In this case: is it going to be or your parents?

Private loans are offered by financial institutions like banks. Therefore, taking out a student loan through private lenders should more or less have the same process as with any other type of loan.

Private loans also do offer a variety of options for loan repayment. Do you think you can manage a monthly schedule? Which will start running as soon as the funds are released to your account. Or would you rather defer the payments until after you’ve graduated? Each choice will have its pros and cons so make sure to think about it hard.

When you apply for private loans, you’ll also be the one to identify first how much you think you’ll need. You can justify your application by saying it’s for student loan housing on top of tuition and other additional costs. The lender will determine if your justification is good enough. And most importantly, if your credit standing is good enough to give the amount you asked for. Be prepared to be offered a different amount, and one that’s less than what you’re hoping to get.

When you apply for a student loan, the most important thing you have to watch out for in private loans is the interest rates. They tend to give out the highest interest rates among the different types of loans you can avail of in this list.

Final Thoughts

Ultimately, however, while there may have been many changes in the landscape of student loans in the past decade, what remains is the fact that it is a crucial part of pursuing your dreams.

True, there are many reasons to be scared and unsure in these times. But there are also plenty of helpful resources you can use to help you feel in better control of your future. Before you apply for a student loan, study your personal loan options. Take a deep look at the considerations, and base your decision on established data and factual information. Then you’ll find taking out a student loan today does not need to be as scary as you think it is.


We Did The Homework on the Top 7 Student Loan Lenders

College tuition fees are very high, and they are increasing almost every year. Over the last decade, public universities have seen a jump in tuition prices of 35%. Unless your parents can afford to outright pay for your college tuition fees, then you may have to consider a higher education loan from student loan lenders for assistance.

What You Need to Know About Finding Student Loan Lenders

Once you have exhausted your other resources, such as using your own savings and getting federal student aid, you still may need some additional support. At this point, it is time to consider finding student loan lenders. To make your search easier, you can use a student loan locator. When searching and deciding between student loan lenders, you should keep these tips in mind:

  • You can not choose your own student loan lender for federal student loans.
    On the other hand, if you are searching for private student loan lenders, then the decision is completely up to you. While this can take some time and effort, it means that you can make an informed decision, based on the advice below, in order to get the best student loan lenders for you.
  • Compare fees and interest rates.
    The fees and interest rates can vary greatly between different student loan lenders, so it is important to compare the rates of multiple student loan lenders before making your decision. There are many possible fees to look out for, including origination fees, early payment fees, and even lender costs.
  • Check your credit score before searching for student loan lenders.
    Your credit score could have an impact on whether or not you are able to get a student loan and at what rates. By checking out what your credit score is before searching for and comparing student loan lenders, you can find out the possible impact of your credit score on your student loan options and give yourself a more realistic idea of what kind of rates to expect.

Top 7 Private Student Loan Lenders

Not all student loan lenders are equal. If you want to make sure you only consider more trustful student loan lenders, then check out our list of top 7 student loan lenders. At a minimum, you need to make sure your provider is legitimate and not a scam.

1. Citizens Bank

Citizens bank logo.Citizens Bank offers both fixed-rate and variable-rate private student loans for both undergraduate and graduate education, and students or parents are eligible to either borrow or refinance loans through the bank.Loan terms range from 5 – 15 years, and borrowers may take out between $1,000 and $295,000. You can borrow a total of $350,000 for some degree types, but this amount includes a combination of private and federal loans. If you are eligible, you can save money by not paying for application, origination, or disbursement fees, and you can also get loyalty and autopay discounts. There is an option of either making regular or interest-only payments while in school, and co-signers may be released after 36 consecutive on-time payments. Citizens Bank has an A+ rating from the Better Business Bureau.

  • Loan Amount: $1,000 to $295,000, depending on degree type and the amount you borrow in federal loans.
  • Interest: 3.48% – 10.78%
  • Terms: 5 – 15 years. You can refinance student loans with Citizens Bank for up to 20 years with interest rates as low as 1.99%.

2. Sallie Mae

Sallie Mae bank logo.Sallie Mae is a popular choice for private student loans. With low fixed and variable rates for undergraduates, Sallie Mae also has no origination fees or pre-payment penalties. One reason Sallie Mae loans are popular is that borrowers enjoy the flexibility with repayment terms, and unlike most lenders, Sallie Mae allows part-time students to take out loans.  A student or parent can apply for a loan and get a result in about 15 minutes. Borrowers can take out enough funds to cover any expenses associated with school-certified expenses, such as tuition, books, meals, travel, and even a laptop. Sallie Mae also has specialized graduate loans, including ones for bar study, law school, and dental and medical residency. International students may take out a student loan with a qualified U.S. co-signer.

  • Loan Amount: $1,000 up to the total cost of college attendance.
  • Interest: Undergraduate variable rates as low as 1.13% and fixed rates as low as 3.50%. Graduate variable rates as low as 2.12% and fixed rates as low as 4.75%
  • Terms: 5 – 20 years

3. College Ave

College ave student loans logo.Another lender with a simple application, College Ave allows qualified parents and students to take out loans for undergraduate and graduate studies, including refinancing options. While there are no application or origination fees, College Ave does charge late fees of either 5% of the payment or $25, whichever is less, for any payment not received within 15 days of the due date. There are no limits beyond the borrower’s own creditworthiness, and loans can range from between $1,000 to 100% of the school-associated expenses. Co-signers can get a release after 24 months of consecutive on-time payments, not counting forbearance or deferment periods. Any deferment or forbearance situation is decided case by case.

  • Loan Amount: $1,000 up to the full yearly cost of attendance.
  • Interest: Variable interest rates as low as 0.94% up to 12%. Fixed as low as 3.24% up to 13%.
  • Terms: 5 – 15 years

4. Discover

Discover logoBorrowers using Discover may qualify for both current and future loans with the multi-year option, meaning they can focus on their studies instead of worrying about whether they will be able to find a good loan in the following years. The multi-year process is simple and does not have an adverse effect on your credit score, and as long as you stay at the same school and pass a credit review you will continue to qualify for the same rate. There are no application, origination, or late fees, and loan specialists are available at any time to help with questions or problems. One thing Discover offers that is very unusual is a cash reward for good grades, equal to 1% of the loan amount. Anyone who earns the reward only has to log in within 6 months and claim it.

  • Loan Amount: $1,000 up to the full cost of attendance, minus any other amount you receive in aid.
  • Interest: Variable rates range from 1.79% – 11.09%. Fixed rates from 3.99% – 11.59%.
  • Terms: 15 – 20 years for a new loan, depending on the degree. 10-20 years for student loan consolidation.

5. Earnest

Earnest logoEarnest is a great lender because of their low rates and lack of fees. Repayment terms are flexible, the application is fast and easy, and you can get a quote in as little as two or three minutes. As a private lender, Earnest has some extra incentives, such as a 9-month grace period and the ability to choose to skip a payment once a year. During the grace period, interest will start to accumulate, so borrowers have the option of making payments on the interest before the repayment period starts. The 9 month grace period is only available if you are not making payments while in school.

The minimum loan is $1,000, but there is no upper limit as long as the borrower qualifies. Single borrowers have 5 to 7 years to pay back the loan, but borrowers with a co-signer have between 5 and 15 years to pay back a loan. Unlike other lenders, Earnest requires borrowers to have at least 3 years of credit history, a minimum FICO score of 650, and a minimum annual income of at least $35,000.

  • Loan Amount: $1,000 up to the full cost of yearly attendance.
  • Interest: Variable rates as low as 0.94%. Fixed rates as low as 2.99%.
  • Terms: Typically 5 – 15 years. Can be extended up to 30 years under some circumstances.

6. Education Loan Finance

Education loan finance logoThe unique thing Education Loan Finance offers is a referral bonus. All borrowers need to do to collect on the bonus is sign up for a referral link, share the link with friends through email and social media, and collect $400 for each friend that refinances through ELFI. The friend gets $100 toward the principal balance of their new loan. ELFI has higher standards than many student loan lenders and expects borrowers to have at least 36 months of financial history, a $35,000 per year income, and a credit score of at least 680. Students can borrow money if they are enrolled at least half-time. Every applicant at ELFI is assigned a Personal Loan Advisor, in order to help with the process and with any questions or problems.

  • Loan Amount: $1,000 up to full qualified amount of expenses.
  • Interest: Variable rates as low as 1.20%. Fixed rates as low as 3.20%.
  • Terms: 5 – 15 years. Parent loans offer 5 – 10 year terms.


Mpower financing logoMPOWER is a student loan lender designed by international students for international students. While other private lenders have more strenuous requirements, MPOWER Financing is one of the best lenders for borrowers with no credit history. Loan amounts range from $2,000 to $50,000, and borrowers have 10 years to pay back the loans. While there is no application fee, MPOWER does charge a 0.5% origination fee, although it is added to the balance of the loan and can be paid off over time. MPOWER offers several discounts, including autopay, on-time payment, and proof of employment and graduation. Borrowers don’t need to worry about co-signers because the process was set up so students wouldn’t have to worry about their credit history or score.

  • Loan Amount: $2,001 – $50,000 per loan. Maximum is $100,000 total.
  • Interest: Typically 11.99%, but you can earn up to 1.50% off of interest with automatic payments, 6 months of on-time payments, and more.
  • Terms: 10 year repayment term.

Loanry is here to help you with everything you need concerning student loans. We not only provide hundreds of informative articles on various financial topics for free, we also help you connect with the best lenders out there.

What You Need to Know About Saving Money on Your Student Loans

It is possible to save money on your student loans. While owing tens of thousands of dollars to student loan lenders is not uncommon, it is also not encouraged to take out more than you need. Many students just blindly accept the full loan amount when they get an offer from student loan lenders, but this is not required. You can choose how much you take, based on how much you really need. By not taking the full amount, you will save yourself from paying back interest later on the money you took and didn’t really need.

Besides just borrowing smart — by only borrowing what you need, you could also save money on your student loans and borrow less money by saving money before college starts. If you are only looking into student aid options when you are applying for college, then it may be too late, but if you are planning ahead, then you could save yourself from borrowing at least a fraction of your education expenses. You could get a job while in high school and save most of the money you make, as well as save any money you get as a gift for your birthday or Christmas. You and your parents can take advantage of programs like Ascensus College Savings that allow you to save money toward your education on purchases you make anyway, such as for gas or groceries both before and during college.

What You Need to Know About FAFSA

If you have been filling out college applications, then you have probably seen the acronym FAFSA. You may not have known what it stands for though: “Free Application for Federal Student Aid”. If you need assistance paying for college tuition, then filling out the FAFSA should be your first step. You should get a better understanding of the FAFSA and how it could possibly help you decrease the overall amount you need to borrow from student loan lenders. Filling out the FAFSA is the prerequisite to receiving any kind of federal financial aid, including:

Grants are a great option of federal financial aid because they are basically an offer of free money. They typically do not have to be repaid, unless you withdraw from school and owe a refund or if you do not complete your service requirement, which applies if you receive the Teacher Education Assistance for College and Higher Education (TEACH) Grant. There are many types of federal grants available, but one of the most common is the Pell Grant. You may qualify for a Pell Grant if you can prove you have financial need and if you have not yet received your Bachelor’s degree.

Scholarships are also a form of free money. They can come from a range of places, but one way to get scholarships is through the federal government. You could also find other scholarships, whether for academic merit — if you got good grades in high school, talent — if you play sports well, or for your particular area of study. Just be careful to avoid student loan scams when applying for outside scholarships. Your high school can help you find places to look for scholarships.

Loans are not free money. They are borrowing money, which you will later have to pay back, with interest. While it can be overwhelming to pay back your student loans, with interest, there are several repayment plans you can choose from. There are four types of direct loans to choose from, including direct subsidized loans, direct unsubsidized loans, direct PLUS loans, and direct consolidation loans.

Work-study jobs are made available through the Federal Work-Study Program. These jobs are a great way to earn some extra money for education expenses while in school, through part-time work. Getting work-study financial aid allows you to sometimes find a student job more easily since the money is funded by the government, so whoever you work for does not have to pay as much themselves. This is a great option, since you can work either on or off campus, though working on campus oftentimes means more flexible work hours, which will help you to fit in work around your academics.

Federal student aid isn’t your only option. You could also get aid from your state government or even from your college or university. Plus, don’t miss out on tax benefits for higher education, including tax credits for higher education expenses and student loan interest deduction.


Before searching for a student loan, make sure you do your homework. Knowing the statistics of student loans in the US and understanding the benefits of filling out your FAFSA and turning it in on time can help you make a more informed decision when choosing your student loan lender. Do not choose the first student loan lender you find, but rather shop around to find the best student loan lender for your situation. If you have any questions, many student loan lenders are more than willing to answer and help you, so don’t hesitate to ask!


How to Avoid Common Student Loan Scams

Worried graduate student shaking a piggybank isolated on white background.

Student loan debt is extremely high and is a major topic of conversation. With financial topics like these, they tend to be the target of scammers. At least three out of five people have received a phone call from an illegitimate company that claims they are the solution to your higher education loan debt.

Sadly, due to desperation, fear, and other emotions, many borrowers fall for the tactics of these scammers. Don’t be one of them. Below, we are going to discuss common student loan scams, how to spot them, and how to protect yourself from them.

How to Recognize and Avoid Student Loan Scams

When looking for a lender, you need to be very careful and do your research. Make sure you are choosing the best option for you. You can always look for help here, on Loanry!

Pay full attention if you want to sign up for a student loan or maybe for a personal loan for students. These are some of the most common signs of fraud that have been detected up to this point:

Upfront Fees and Monthly Fees

Most student loan scams will require that you pay upfront fees for their services or monthly fees. You will likely hear this a couple of times through this article, but it is important. Charging a fee for services does not automatically point to a scam. However, it is against the law for any debt relief help to charge fees before getting your results. There should be no upfront fees for the service at all, so if someone is trying to charge you before they do anything, run the other way.

As far as monthly fees go, they are not necessary. Understand something: You do not have to pay to receive grants or scholarships. Even if you get private student loans, you do not have to pay upfront. You also do not have to pay for things like:

  • Filling out the FAFSA
  • Changing your repayment plan or payment amount
  • Loan consolidation
  • Deferred payments
  • Loan forgiveness or other government programs

Every bit of those things is free of charge. Occasionally, scholarship providers may require an application fee. This is not necessarily unusual or a scam. If you are trying to apply for one that does ask for a fee, look into the scholarship first. Your school should be able to help you do this. A simple Google search can usually find pertinent information as well.

As far as any current student loans go, you can handle any business you need to directly with the loan service provider. My student loan service provider has an excellent website- as most of them do. I have the ability to change my payment plans, apply for an income-driven repayment plan or other plans, and more. I even have the ability to choose which of my loans get my payment if I want to pay a different one than the one they have placed as first in line.

And if I have any questions, I can contact them directly through the website- no middle man required. Don’t pay for something that you can do yourself for free. And do not be fooled into thinking you cannot do it yourself. Take a look at, too, for anything related to federal student loans.

Aggressive Sales Tactics and Urgency

Everyone I know has experienced the tactics of a salesperson. They push and push and push to get you to buy. They make you fear missing out on a deal so you hurry and sign up immediately. The harder they push, the more you know that their paycheck probably relies on the commission from your purchase.

Unfortunately, student loan scams tend to be worked by experienced salespeople. They know what to do to push you into a decision you probably would not make otherwise. If you feel pressured to sign up, take a step back, and look into the company.

Tips for Avoiding Student Loan Scams

Improper Grammar and Spelling

Grammar and spelling mistakes are not all that odd. It is easy to accidentally press a “T” instead of an “R” on your keyboard, or something similar. It is also not unusual to get so caught up in your writing that you type “your” when you mean to type “you’re”.

While everyone can make an occasional spelling or grammar mistake, many communications from companies that pull student loan scams contain a good deal of them. It is not always the number of errors, though. Sometimes it is the errors themselves. Unusual errors are a good sign that the company is fraudulent.

Most legitimate companies have fewer errors. This is because many of them have a spell check program on their computers. They also tend to actually double-check their work.

Don’t get me wrong- bad communication does not necessarily mean that it is one of the student loan scams. Even those of us who write for a living like me make mistakes and do not always catch them. These mistakes are more of a red flag than a full stop sign. If you receive a communication like this, take a beat and check into the company.

Asking for Authorization

A lot of companies committing student loan scams ask for things that they have no business asking for, such as your social security number, your FSA ID, your sign-in information on your loan service provider websites, or even for you to sign a power of attorney agreement giving them the power to “negotiate” your accounts. Please pay attention: No legitimate source of student loan help will ask you for any of that information. If you give these scammers any of that information, you could end up in a lot of financial trouble. You absolutely never know what they will do with it.

If messing up your finances is not scary enough, think about all of the information that your student loan service providers have: Your identifying information, any income verification you turn in, family information, your home address, your telephone number, credit card information, and more. They can use this to steal your identity, clean out your bank account or credit accounts, and more. And, let’s just be honest, there are stalkers and others out there who might use your home address for other reasons. So, do not give out this information.

Steps to Determine if a Website is Fake

The Threat of Legal Action

Have you ever received one of those phone calls that tell you if you do not take immediate action that day, a law enforcement officer will be at your house that afternoon? I have, and the first time, I was scared to death. Fortunately, I had missed the live call and heard this threat on my voicemail, so I did not have to respond to a person immediately.

Instead, I searched my brain for anything that would warrant such action and finally called a friend to share my fear. Turns out, she had just experienced something similar and told me that it was a scam. After no law enforcement officer showed up at my house that afternoon- or any afternoon thereafter- I realized that she was right.

People that scam others play on their emotions. One of those emotions is most definitely fear. If they can make you afraid enough to believe that you will be in jail, there is a good chance you will do what they ask. Let’s alleviate some fears, shall we?

I cannot think of one single civil or consumer debt that you can be jailed for in America. If any debts can put you in jail, it is those such as unpaid taxes or unpaid child support. However, even those do not typically put you in jail automatically. There are court proceedings and warnings and a process.

Additionally, you do not get phone calls for stuff like that- unless it is from a lawyer you hired. Courthouses do not call. They send out official letters, usually dropped off by an official delivery person or process server.

Other debts, however, like credit cards, loans, and such do not put you in jail. They can ruin your life in ways like keeping you from getting credit, buying a home or car, getting good interest rates, and possibly even getting certain jobs. Imprisonment is a totally different story.


A lot of companies running student loan scams will claim to be affiliated with the Department of Education. While the Department of Ed does work with some companies, most companies that claim an affiliation are lying. You can look at the Department of Ed’s website to see what trusted companies they work with, but remember, you are not required to pay for help with student loans. If someone is trying to charge you, know that you have many free options.

Common Student Loan Scams

The number of student loan scams in play will likely continue to grow over time. And they will probably get more and more creative. Don’t let them fool you and don’t think that you will save money on your student loan with their loan options. For now, though, there are some common ones to look out for:

A Stop in Your Loan Forgiveness

Scammers use fear and urgency to get results. If someone calls you or sends you a notice that your loan forgiveness is about to end, ignore it unless it is straight from the Department of Education or your loan service provider. If there really is going to be a change, one or both of these two organizations will send you an official notice.

Additionally, even if the government decides to make changes, it will not happen overnight. Things like that take time to move through all parties that must agree on them. It also takes time for things to be put in place. So, if there is going to be a change, you will know about it way ahead of time- not a few days or a few weeks beforehand.

Total Loan Forgiveness

One of the most common student loan scams is when companies offer total or fast loan forgiveness. There are a couple of things for you to know here. First, only special circumstances can completely discharge your student loans. This tends to be things like:

  • Death– and no one wants to die to avoid student loan debt
  • Disability– not a temporary disability but extreme and permanent disability
  • Bankruptcy– in some very, very rare circumstances
  • Public Service Loan Forgiveness and Teacher Loan Forgiveness– for borrowers who work in certain job types for a specified amount of time

The second thing to know is that none of these circumstances can get your loans discharged quickly. They all require a certain process and can take up to years to work fully. Companies claiming that they can do this for you are committing student loan scams- stay away from them. If you feel that you qualify for student loan forgiveness, you can speak to your loan service provider about it.

Loan Repayment or Loan Debt Relief

If a company claims that they can settle your debt for lower than anyone else or that they can get you a special deal, it is not true. While debt relief companies can help you settle your debts for lower than the original amount, they cannot get better results than you or any other company can. If you choose to use a debt relief company, that is up to you. However, do not hire a company over because of an untrue guarantee.


The Better Business Bureau warns of another of the popular student loan scams: Federal student tax. Scammers call unsuspecting borrowers claiming to be IRS agents or even FBI agents saying that they owe a federal student tax. This scares borrowers into paying these scammers to stay out of legal trouble. Here is what you need to know:

  • There is no such thing as a “federal student tax”. This is a completely made-up term
  • If you owe the IRS for anything, you will receive an official notice– not a phone call
  • The FBI does not collect debts, and they certainly will not call you asking for money to do such. If any legitimate agency needs to contact you, they will send official notices or show up at your door with official badges. Even then, you can make calls to verify their identity. The FBI is no stranger to scammers, so the legitimate organization will have no issue with you verifying someone’s identity. But again, they are not debt collectors, so if someone shows up or calls about your debt, hang up or shut the door

Reduce Your Risk of Being Scammed

  • Only apply for student aid on the official FAFSA website to prevent illegitimate sites from intercepting your information. After completing the application, completely close out of your browser.
  • Your FSA ID and your login information are for you and you alone. Do not give them out to anyone. Remember, legitimate sources will not ask for them.
  • Keep as much of your personal information as possible securely at home. Do not carry it around with you.
  • If you feel you have given your information out to any illegitimate source, reach out to the supplier of that information- such as your student loan service provider, your credit card company, and so on. And immediately change any login information and passwords, cancel credit cards, and take any other precautions you can. The quicker you make these moves, the better chance you have of stopping trouble before it starts.
  • Always, always, always check that any website you are entering personal information on is secure. You can easily do this by looking in the web address bar for a little lock. If it is there, the website should be secure.

Companies Known for Student Loan Scams

There are several companies that are known for student loan scams. Unfortunately, these scammers often simply just open up under another name. However, the FTC does share a list of companies that are known for student loan scams here, so be sure to check it out.


While organizations do work hard to prevent scammers from succeeding, it is up to each one of us to protect ourselves and our families. Learn all you can about scams as they are outed so you know what to look for. Above all, remember that if you need any help with your student loan debt, you can go straight through your loan service provider or the federal government for help.

If you are contacted by what you feel is an illegitimate company, report it so that others can be made aware. You can do this through your loan service provider, the FTC, or your state attorney general’s office. These complaints are taken seriously and you can trust that they will be investigated.


How to Get Grants for College to Avoid Student Loans

Happy smiling millennial girl holding paper document, received good news letter, university admission notification.

College is not cheap- this is a widely known and well accepted fact. While tuition varies depending on the college and degree, you are looking at spending at least tens of thousands of dollars. As nice as it would be, most of us do not have that kind of money lying around, so we have to find a way to pay for it.

Grant Options for College to Avoid Student Loan Debts

For many people, student loans immediately come to mind, but those should be a last resort. Student loan debt is difficult to get out of, and most people stay stuck in it for years and decades. The average student debt ranges from $26,900 to $55,882 depending on the state and the type of school the student attends.

Before you resign yourself to debt, you should look for grants for college. Grants do not have to be repaid, so if you can get grants for college, you can avoid that student debt. At the very least, even if you have to get some student loans, you can minimize your student debt by getting grants for college.

This guide is intended to give you a starting point for getting grants and some information on grants that you might qualify for. It is in no way all-inclusive, but it can give you a great start.

Fill Out the FAFSA

The first step you need to take for any type of financial assistance is to fill out the FAFSA- the Free Application for Federal Student Aid. It asks you a series of questions regarding your financial information. If you lived with your parents the previous year, it will also ask for their information.

Before going any farther, let’s address the fact that not every student’s parents will be willing to help with the FAFSA and some are not able to. This does not automatically disqualify you for aid. If your parents are unable to provide their information due to being mentally incapacitated, incarcerated, or they are abusive, you can fill out the FAFSA, indicate that you cannot provide their information, and then call the financial aid office to apply for a student dependency override.

If your parents are simply unwilling to help, it changes things a little. You should still fill out the FAFSA and indicate that you cannot provide your parents’ information. Then, as soon as possible, call the financial aid office at your school to explain the situation. The lack of parental information may disqualify you for some aid, but not all. If there is anything you can apply for, the aid office should be able to help you. Many grants are not dependent on parental information, anyway.

After you have filled out the FAFSA, you will receive a Student Aid Report (SAR). It will provide your EFC, or Estimated Family Contribution, and the estimated amount of aid you might qualify for. This report will let your college know if you will qualify for grants, how much of your tuition should be covered, and if you will need additional aid.

Even if you do need more aid for school, you do not immediately have to jump to student loans. There are other grants for college that you may be able to receive and you should exhaust those possibilities first. Let’s go over some of the most common grant options.

Federal Grants for College

Federal grants include Pell grants, one of the most well-known grants in America. These are grants that are based on financial need. Most Pell grant funds go to students whose total family income is less than $20,000, though the family income of up to $50,000 sometimes qualifies.

There are other stipulations, such as the student is looking to earn their first Bachelor’s degree, but exceptions are made for some post-graduate degree programs. The amount of the Pell grant often changes every year, and student awards are determined by different factors. However, the maximum Pell grant amount for the 2022-2023 school year is $6,895.

That amount is enough to cover some community college tuition. When I attended my local community college, the Pell grant was enough to pay for all of my classes and my textbooks. Even if it does not pay all of your tuition, it can still help tremendously.

In addition to the Pell grant, you might qualify for the Federal Supplemental Education Opportunity Grant (FSEOG). Every year, the schools that participate in this program receive a set amount of funds. The school then determines which students have the greatest financial need and award them some of those funds, which could be anywhere from $100 to $4,000. This is a program you should look into as early as possible. The schools only receive these funds once a year, and once the money is gone, you have to wait until the following year.

State Grants for College

After federal grants are state grants for college. The types of grants available vary according to the state.

Some states provide grants to minorities. Others might specialize in assisting those with a disability or who were in the foster care system. Other states might award grants to students in certain fields that desperately need to be filled in that state. Your school or state agency should have the necessary information for these grants.

Grants for Women

As there is an apparent difference between men and women in their opportunities and income levels, some organizations have taken an active role in making changes. There are several grants available specifically for women, including The P.E.O. Program for Continuing Education and the Soroptimist Live Your Dream Award.

Grants for Minorities

There are also grants geared toward ethnic minorities, such as Asian Americans, Hispanics, Native Americans, and more. Sometimes, these grants will be made available through filling out the FAFSA. Others take more research, but your school should have some information on them.

Do not just think about the federal grants available to minorities, either. Check with any ethnic organizations or groups. I am Native American. The tribe I am registered with provides a certain amount of grants and scholarships each year. These are apart from any that my schools knew of. It is always best to do your own research as sometimes private organizations do not advertise their grant programs.

Minorities illustration

TEACH Grants for College

If you are going to school to be a teacher, you should look into TEACH grants for college costs. While these do not have to be repaid, you do have to agree to teach in a school that is in an underserved area for four years after graduation. It seems like a pretty good trade off – you get help with college costs and you get the chance to impact the lives of children who need caring teachers.

Military Grants for College

If one of your parents served in the military in Iraq or Afghanistan after 2001 and passed away because of it, there are grants available to you. Talk to your school counselor or the financial aid office at your college of choice for information on these.

School Grants for College

Individual colleges also sometimes have grants and scholarships for their students.

I was once awarded a scholarship for keeping my GPA high in the first two terms of college. The award was only about $800 each term, but that definitely helped cut back on my student loans.

Talk to your school about what is available from them. They might not be available in your freshman year, but you can start working toward them from the beginning.

Academic Competitiveness Grant (ACG)

The Academic Competitiveness Grant is an additional aid for those who qualify for the Pell grant. In order to be eligible, you have to have completed what is termed a “rigorous secondary school program of study” with a minimum of a 3.0 GPA. The Secretary of Education determines what programs qualify each year, but it is referring to programs such as Honors and AP courses. You can speak to your school counselor about the ACG- he or she can help you determine if you are eligible.

SMART Grants for College

Pell grant recipients should also consider the SMART Grant program, which is the National Science Mathematics Access to Retain Talent. It is awarded to students who are entering STEM college programs, foreign languages, and other high demand careers. There are other requirements, including being a junior or senior in your degree program and having a minimum 3.0 GPA. This award is up to $4,000 per year.

Special Interest Grants

If you are a musician, artist, photographer, vocational student, or something similar, you might be able to find grants for your specific interest. These may require a little more research on your part as they will likely come from local organizations, but you might find some that are nationwide. Talk to your teacher as they probably have some inside scoop.


Every year, there are writing competitions, art competitions, science competitions, and more. Some of the prizes include grant and scholarship money. Whatever you are interested in doing, look for competition. Enter as many as you can that award college aid or cash to the winners.

Employer Grants

If you have a job, your employer may have their own grant program. I have heard of quite a few companies having grant and scholarship programs. Some were large and others were small. If your employer does not, ask your family members if any of their employers do. You never know what you might run across.

Tips for Getting Grants for College

There are a couple of things you can do to make your chances of getting a grant higher.

One of the biggest mistakes among college students is waiting until the last minute to apply for their financial aid. Doing so is only working against yourself, though. If you can, it is a good idea to start your research in your freshman year of high school. Even if you cannot yet apply, you will know what you need to do to be eligible and can mark the application date down now.

If you are past your freshman year, it’s okay. Just start as soon as you can. Even if you do not have time to apply for them all this year, you can always apply next year.

As you can see, you can get more than one grant at a time, so there is no reason to only apply for one. You should take the time to apply for as many as possible. Who cares if you have to get 10 small grants? It all adds up. If you apply for enough, you might not need a penny of student loan money.

Applying for grants should not be a one time thing for your entire college career. You should be searching for and applying for them every single year. Some grants are not available until you have completed a certain number of classes, like the SMART grant mentioned above. The award I received only came after I completed a full year with that high GPA. Take some time each and every year to research what you qualify for.

In the midst of applying for 35 grants for college, it is easy to forget what you have and have not yet done. You should try to maintain a list of the grants you have applied for and need to apply for. You can keep this on a sheet of paper if you like, but if you have a spreadsheet program, you can keep up with more details to help you stay on track. Start by making the following column headings:

  • Grant Name
  • Grant Purpose: Is it for minorities, STEM, simply income based? This will help you remember what you actually applied for.
  • URL for application: Whether you need to revisit the site later or you have not yet filled out the application, keeping up with the website to apply on is a wise move. And, if you are going to reapply the following year, you already have the information on where to do so.
  • Status: Have you applied yet? Are you awaiting results? Have you been approved?
  • Date of Application: It is important to remember when you applied. Many times, an application will tell you about how long it takes to receive results. Keeping up with your application date will let you know how much longer it should take or if you should reach out to someone because it is taking too long.
  • Approval Amount: If you are approved, type the amount into this box. This will help you keep up with how much of your college costs are currently covered and how much farther you have to go.

This spreadsheet can make the application process a little smoother. You can pull it up again next year when it is time to start applying for grants, too. You might also use it to keep up with information on grants that you do not yet qualify for but will in the future. It is a lot easier to make note of that information now than to try to remember where you found it next year.


After you have exhausted all other possibilities, you may still need to consider student loans. If this is the case, be sure that you shop around for the best ones. Different student loans have different terms and interest rates, so you need to research what you are getting. You can rely on Loanry to help you with this.

Additionally, keep in mind that student loans are not the only way to pay for school. Compare the rates and terms to personal loans as well. You might find one that is more affordable and that you can pay off much easier. You do not want to end up as another student loan debt statistic, so you should do all that you can to minimize student debt or avoid it altogether.


Your Educational Guide On How to Pay for College

Hat graduation model on banknote saving for concept finance education and scholarships

A decade or two ago, the answer would have seemed simple. How to pay for college? Student loans! Take out as much as you can from as many places as possible. And defer repayment for as many years as you can get away with! By the time you have to make your first payment. You’ll have a great career and tons of money and you won’t even miss that monthly installment! Unfortunately, it didn’t always work out quite that way. That’s why we’re reviewing all your options below.

Quote about education

Save Up Ahead of Time

Obviously, it’s ideal if you’re able to start separate savings account well ahead of time, whether the student is you or your offspring or anyone else for whom you’re responsible. Keep in mind that even a few thousand dollars can make a huge difference when it’s time figuring out how to pay for college. In addition to tuition, there are application fees, textbooks to buy, on-campus housing, and endless other expenses to consider. The ability to pay for many of these peripheral costs out of savings simplifies things considerably. And the less you have to borrow, the better.

Grants and Scholarships

Everyone knows that grants and scholarships are amazing, primarily because you don’t have to pay them back. The trick, sometimes, is finding them. They come from so many different sources. And because they’re often privately funded and target specific schools, demographics, majors, or other factors, there’s no one source for locating all for which you might qualify.

That does not mean, however, that you should ever, ever, EVER pay someone to look for grants, scholarships, or any other sort of financial aid for you. There are no secret codes for tracking these things down – no private databases or inside tracks. Every possible bit of information related to financial aid is free for the asking, and that’s how it should stay.

I’m going to assume you’re already familiar with the FAFSA. It’s your one-stop ticket for anything offered through state or federal government or the college or other post-secondary institution of your choice. The FAFSA acts as an informational tool for schools you’re considering, so they can help you with options. And a sort of universal student loan locator – at least when it comes to traditional student loan options.

You should always complete a FAFSA early in the process, however you plan on paying for school and whether you expect to qualify for aid or not.

The stuff that we’re talking about are things like that $500 scholarship your parents’ church offers for anyone going into the ministry, or the $2000 a local Native American group has available for anyone who can establish tribal membership or money from a local industry to support students pursuing training in electronic engineering or plasma physics or arts and crafts. Whatever it is they need more of but can’t find enough of.

Start with your (or your kid’s) high school counselors or the college and career office in your district, if such a thing exists. You may find tons of excellent information, or you may be handed a few generic brochures or pointed to a website or two. They may be totally confused as to why you even asked. That’s OK, though, because it was worth asking. Sometimes those high school counselors are a gold mine.

Next, talk to the financial aid offices at your top 2 or 3 choices for where you’d like to attend. Find out what connections they have, what they know about, what they suggest. Your chances are much better with this group. Since they don’t make money unless you come to school there, and coming to school there means finding a way to pay for it. Try everything they suggest, whether it makes sense to you or not. No matter how successful, or not, we’re not done.

Go to your local library and tell them what you’re looking for. Once again, you’ll often hit gold with this option. But it depends on who answers the phone or who’s at the desk. If you don’t get satisfactory responses the first time, try again during a different time of day or – better yet – a different branch.

Get online, but let me repeat – NO LEGIT ORGANIZATION IS GOING TO TRY TO CHARGE YOU FOR GRANT OR SCHOLARSHIP INFORMATION. You’re better off trying to help out that Nigerian Prince if you insist on being careless with your financial and personal information online. Instead, try the U.S. Department of Labor’s free scholarship search tool. Search the name of your state plus the words “grants and scholarships.”

Ask your parents to check with their employers. The bigger the company, the better the chances they have some sort of aid available. If you’re working, check with your employer. Even companies like McDonald’s are advertising their willingness to help with tuition for their employees Although, it’s probably safe to assume there are some strings and limitations attached.

But that’s OK because your goal at this stage isn’t to accept or refuse anything – it’s to gather options and information. Remember, you’re the Magical Grant and Scholarship Locator. By which I mean, you’re putting in the time and effort to find grants and scholarships to help you figure out how to pay for college.

Finally, ask yourself what “groups” you might belong to. Any demographic outside of “generic straight white able-bodied male” has organizations and advocates scattered across the country, many of whom offer small grants or scholarships for those who qualify. Now, you may be the sort who doesn’t like to see yourself as a member of this group or that. Maybe your politics or personal preferences are such that you don’t want to “play that card” for personal gain.

With all due respect, in this case, you need to get over that and apply for the grant or scholarship. The best thing you can do for yourself, your “group,” your community, family, state, or nation, is getting that education and be all you can be personally, professionally, and financially. If that means that for once in your life you have a chance to exploit the fact that you’re a one-legged transgendered Czech-Irish Buddhist, then go for it.

Don’t worry, we’re not going to think less of you for claiming that $400 stipend from the local chapter of similar folks.

Student Loan Shopping

They’re everyone’s absolute last option for how to pay for college. That’s not entirely fair. Student loans are a necessary option for the many college students, no matter what their age range or where they’re attending. And if you learn how to save money on a student loan, it can be a really good option for you. But let’s look at some other possible answers for how to pay for college first, then come back to them.

Traditional student loans (the ones offered through the federal government) have several advantages:

  • Fees and interest rates tend to be lower than what you might otherwise qualify for.
  • Your credit score is not a major factor in determining whether or not you qualify.
  • Repayment is often deferred until graduation or sometime thereafter.
  • Repayment can be tied to your income, so the less you make, the less your payments.
  • There are sometimes options for “debt forgiveness” if you work in certain professions or specified geographical locations.

Now, I’m about to talk about some other options for how to pay for college, or at least how to pay for part of your post-secondary education in other ways, should you so choose. That doesn’t mean I’m against student loans. As with any loan, I merely suggest you pay attention to the details. And don’t assume anything about the terms or your ability to repay without taking some time to consider all of the possibilities.

I’m not interested in telling you WHAT to do, my friend. If you’re about to enter an institution of higher learning, you should be able to do student loan shopping, gather information and consider your options. Then decide for yourself how to pay for college, yes?

Student Loan pros and cons.

A personal loan is your most basic sort of loan. You borrow a specific amount for a set length of time. And agree to an interest rate and a structured, predictable plan of repayment. The terms you’re able to secure are largely driven by your credit history and three-digit credit score. Although, your current income and anticipated employment may play a role as well.

If you’re pursuing post-secondary education other than that offered in a traditional four-year university, a personal loan for students might be a helpful option. Not all forms of training or education qualify for traditional college loans, or the amount may be modest enough that you’d rather tackle it like any other financed expense. I’m not pushing this option for everyone. But depending on your circumstances, it might be the simplest and most obvious solution.

This is an arrangement you make directly with your school of choice. Rather than borrow money for tuition with specific terms guiding repayment, you commit a percentage of your future income to the school instead.

The flexibility of the income share agreement is obvious – if you end up with a strong income, the school gets paid back quickly. If you don’t make as much as you’d hoped, your repayment is based on a percentage of that rather than the amount you actually owe. Typical ISA agreements are tied to a length of time rather than a dollar amount. So if you agree to give the school 7% of your income for ten years, you might end up paying way less for your education (if things aren’t going well) or double what other students pay (if your career takes off).

Most financial experts aren’t in love with ISAs. Do some research and make up your own mind before considering this option.

The answer to how to pay for college is almost never “Use a credit card!”  That doesn’t mean, however, that responsible credit card use can’t be a part of your plan for incidental expenses as you pursue your education.

Keep in mind that while credit card companies aren’t necessarily evil. They do have a vested interest in “hooking you” early. And start you along the path of eternal repayment without ever being repaid. Don’t just assume you know all there is to know about credit cards for students and fall into the trap of going to either extreme – careless use and irresponsible debt or absolute refusal to carry any form of plastic.

College, among other things, is about learning to adults. Responsible credit card use is part of Adulting 101. With great power comes great responsibility. And learning to use revolving credit responsibly gives you financial power and stronger long-term credit.


There’s no one answer on how to pay for college. Take some time and weigh your options, and above all else, DON’T GIVE UP. It can be a frustrating mess sorting through your choices and keeping up with everything, but guess what?

Welcome to college and the messy world of grown-ups. It may not be easy, but you’ll get so much better at it is difficult that you won’t even notice after a while.


Various Types of Student Loans: Borrow Smarter

Graduation Cap for savings coins for scholarships for funding and education.

It isn’t easy to pay for a college education. The average price of one year at a public university, including tuition, fees, room, and board at the in-state rate is almost $21,000. The private school rate is almost $47,000. That can exhaust 529 plan savings pretty quickly. That’s why so many college students and their parents take out student loans to bridge the financial gap. So many loans that it is estimated there is $1.53 Trillion in student loan debt swirling around out there.

When it comes to borrowing money to pay for college, there are options. Here is what you need to know about the types of student loans that are available to you.

Types of Federal Student Loans

A loan is simply money you borrow that has to be repaid over time with interest. The federal government offers student loans and usually has better repayment terms than private lenders, like banks.

The federal government offers four types of student loans.

  • Direct Subsidized Loans – These types of student loans are for undergraduate students who demonstrate the need for assistance paying for college.
  • Direct Unsubsidized Loans – These are student loans offered to graduates and students. These types of student loans are not based on financial need.
  • Direct PLUS Loans – These types of student loans are for graduate or professional students or parents with undergraduate dependents who are students. These loans are designed to help with college expenses that aren’t already covered by financial aid. Borrowers of Direct PLUS loans have to pass a credit check.
  • Direct Consolidation Loans – These types of student loans allow a borrower with multiple outstanding federal loans to roll that debt into a single lump sum that is managed by a loan servicer.

How Do You Apply for Federal Student Loans?

The first step toward obtaining a fed student loan is to complete the Free Application for Federal Student Aid form, or FAFSA. Before you sit down to work on this application, gather up your Social Security number, previous Income Tax Returns, and W2s that demonstrate your income. You may need bank records and records of investments as well. If you are a dependent student you will need to have all of this information about your parents as well. You aren’t eligible to receive any federal loans or grants until your FAFSA is completed.

Based on the results of the application, your college or career school will make you an offer of financial aid that may include grants and loans. This is the time when you will be able to compare the financial aid being offered to you by different schools.

Before accepting an offer of federal student aid, you will be given counseling to make sure that you understand that the assistance is a loan that will have to be paid back with interest.

The FAFSA will need to be updated by you each year. Schools often make decisions about scholarships based on the information in the FAFSA.

How Much Federal Aid Will You Receive?

Undergraduate students may have a borrowing maximum somewhere between $5500 and $12,500 each year in Direct Subsidized Loans and Direct Unsubsidized Loans.

Graduate or professional students can borrow up to $20,500 in Direct Unsubsidized Loans each year.

Parents with dependent children who are undergraduates may borrow Direct PLUS loans for outstanding costs of college not already covered by financial aid.

One important note about offers of federal financial aid. Just because the government offers you money, you don’t have to take it. You can accept only part of what is offered to you if it aligns better with your repayment goals.

What are Some of the Positive Features of Federal Student Loans?

Federal loans are usually offered at a fixed interest rate. And that rate is usually lower than what is available at banks.

Most of the time no credit check or co-signer is required when taking out a federal student loan.

Federal loans offer a six-month grace period between the end of college and when payments on the loan have to begin. This is designed to give new graduates the chance to get on firmer financial ground. Interest does accrue during those six months.

The federal government offers flexible repayment plans including some that are income-driven and assume you’ll be making more money as you gain experience in the work world. You can ask for new repayment terms at any time. The government also works with borrowers who are having trouble meeting their loan obligations. Sometimes payments are lowered or temporarily suspended so that the borrower can get back on track.

The federal government also has programs in place that sometimes forgives the balance of student loans. One is called Public Service Loan Forgiveness, or PSLF. It is sometimes available for borrowers who work in qualifying government jobs or jobs in the non-profit sector. After the borrower makes 120 monthly payments, the program could be used to pay off all remaining student loan debt.

There is also a Teacher Loan Forgiveness program that educators can apply for after they have taught for five complete and consecutive years in a low-income school. That loan forgiveness program could discharge up to $17,500 worth of student loan debt.

Private Lender Student Loans

There are private lenders that are in the business of loaning money to college students. These types of student loans come from banks, credit unions, and some online loan shops. You should only begin shopping for private loans if you have already exhausted all the available options in loans from the federal governments. The interest rates tend to be larger than government-backed loans. And the student’s credit history plays a factor in the loan.

How Do You Shop for Loans from Private Lenders?

When you are shopping for a student loan through a private vendor you are searching for the types of student loans with the best interest rate and the most favorable repayment schedule. You want to apply to a number of lenders so that you can compare their offers. Unlike the FAFSA form, you will be filling out applications for each potential lender. Private lenders don’t allow you to change your repayment plan as the federal government does. Changing the terms of a private loan requires refinancing or consolidating.

Some online stores bring you multiple offers from lenders very quickly after filling out their forms. These include sites like Credible and College Ave. These sites work as a student loan locator service. Their lending partners prequalify potential borrowers for loans at particular rates. You don’t pay more to use their service. The lenders pay a fee to be a part of their network. You also fill out one application and you may see as many as 10 loan offers which give you the tools to make comparisons.

Filling out one of these online forms doesn’t impact your credit score at all. It is noted as a soft request. Only hard inquiries become part of your credit history.

What is the interest rate on the loan and is the interest fixed or variable? Fixed interest is set for the life of the loan. Variable interest changes throughout the loan and is tied to a financial metric. Sometimes interest rates on a variable interest loan can change without much notice.

The shorter the loan the less interest you will pay, but each monthly payment will be higher. This step requires looking into the future and evaluating the payments you’ll be able to afford.

Private lenders will do credit checks on loan applicants. Expect to pay a higher interest rate on a loan if your credit score is less than 690. Your credit score is based on your credit history and is usually reported as a 3-digit number. Three of the major credit reporting agencies are TransUnion, Experian, and Equifax. Many lenders require a co-signer for borrowers with low credit scores. This happens to recent college graduates who haven’t yet build a solid history of managing credit and debt.

If someone co-signs for your loan, your credit history becomes meshed with theirs. If payments are missing or late it impacts the credit score of the co-signer as well as you. Successfully managing a student loan is one way to build a positive credit history.

Should You Take Out a Personal Loan to Pay Off a Student Loan?

It is usually not a good idea to take out a personal loan to pay off any type of student loan. In general, the interest rates on personal loans are higher than student loans. And personal loans usually come with a shorter payback time. Most have to be paid in full in five years.

A personal loan will not come with any grace period to begin making payments as federal student loans do. The interest on a personal loan isn’t tax-deductible. The interest on a student loan is.

Income Share Agreement

An Income Share Agreement, or ISA, is a non-traditional method for financing a college education. An ISA is an agreement between the student and the school that the student will repay the cost of the education after they have graduated and are out in the workforce. Instead of borrowing money upfront to pay for college, this is money paid on the back end.

In an Income Share Agreement, the school calculates what it believes to be the student’s future earning power based on what they studied and sets the payments accordingly. Tying the cost of college to a student’s major requires complete transparency on the part of the school and how it reports student success.

Income Share Agreements are only available at a limited number of colleges and universities.

Should I Put College Costs on a Credit Card?

When it comes to paying tuition with a credit card there isn’t one answer for everyone about whether it is right or wrong. If tuition is going to end up as a balance on a credit card that is subject to high interest and late payment fees, then taking out a student loan is a smarter choice. But if you are interested in capitalizing credit card rewards, charging tuition to a card might be a good strategy.

  • If the credit card accumulates reward points based on each dollar spent, then paying for a chunk of college could rack up many rewards.
  • Some cards will offer a sign-up bonus that increases the number of reward points exponentially.
  • Some card issuers offer 0-percent interest for a limited time when the card is brand new.
  • If your card has a minimum spending limit before rewards kick in, then putting tuition on that card may be the way to get to that threshold.

There are some things to watch out for that may erase the benefits of putting the cost of college on a credit card. Not all schools accept credit cards. But most of the ones that do will add a convenience fee on top of the payment. A convenience fee on a big purchase like tuition may erase any rewards or benefits that were earned. Another issue with putting college on a credit card is that the limit on the card might not be large enough for a tuition-sized expense.

If you use a credit card for educational costs treat it like it is a debit card. Completely pay the balance when it is due so that interest doesn’t begin to accumulate. Student loans offer a much better interest rate than credit cards.

Should I Consolidate My Student Loan Debt?

Consolidating multiple types of student loans into one loan can make it easier to track what has to be paid and when it is due. If your loans are all federal loans you can request that they are consolidated. The interest rate will be based on the interest rates of the original loans, so this isn’t a way to reduce payments by scoring really low-interest terms.

When private loans are consolidated it is usually referred to as refinancing. It is often done to capture a better interest rate. If you are consolidating federal loans and private loans into one package the federal loans lose some of the special considerations they once had like repayment options and forgiveness.


The first steps toward paying for a college education include tapping savings, applying for scholarships and grants and investigating work/study opportunities. But if you need student loans to bridge the gap between what you have and what college costs, start with the federal government. The government is in a position to offer the best interest rates on these types of student loans. The federal government usually doesn’t need a credit check before the loan is originated and offers a six-month grace period where no payments are due after graduation. Borrowers can request to change the repayment terms of their loan or consolidate multiple federal loans into one loan at any time. If you are beginning the search for federal loans you have to fill out a FAFSA form located on the website.

Private lenders also issue student loans. They usually come with a higher interest rate than federal loans. When shopping for private loans you can compare the terms different lenders are offering you on these types of student loans. That includes interest rates and the length of the loan. You can go to individual lenders, like banks or credit unions, and fill out applications for each one. Or you can go to an online mall and fill out a single application that can prequalify you and pair you with loan quotes from the site’s preferred partners.

No matter where your loan originates you should commit to paying it back in full and on time. That will help you build a solid credit history.


How to Find Your Student Loan Servicer: Smart Tips

Female student study in library using tablet and searching internet while Listening music

Student loan or campus loan repayments can be confusing. You know you have to make the payment. But where do you send the payment and where do you find your student loans? You won’t necessarily be paying the same entity that lent you money. Your student loan servicer and lender could be different so there are some things you need to know.

Finding a Student Loan Servicer

Finding your student loan servicer will be a different process depending on whether you have a private student loan or federal loan. If you have both types of loans, you will have to find your servicer for each one. There are nine different federal student loan servicers so it’s easier to find your servicer for your federal loans.

If you have a federal student loan then go to the National Student Loan Data System and use it as a student loan locator. Click on Financial Aid Review and then log in using your FSA ID. If you don’t have an ID number then you will have to create one. Once you log in you can see a summary of the loan data. This includes the different types of student loans you have, the amounts and any outstanding balances, and interest. Each loan also has a number next to it. And, if you click on it, it expands your information and contact information for the lender at the bottom of the page.

If you have student loans that are private, it takes a little more work to find the student loan servicer. It helps to start looking at your credit reports. And you are able to access your reports from the three main credit bureaus. You can also check your most recent loan statements to find the servicer.

What Does a Student Loan Servicer Do?

The student loan servicer is the company that manages your student loans. They act as a third party and a middleman between your lender and you. When you do make a payment toward your loan, it is the servicer that manages it. Servicers work with borrowers to help manage student loan repayment. If you need to change your repayment plan or apply for forbearance or deferment then you need to discuss your options with the student loan servicer.

You will want to work with your student loan servicer as best you can. Once you start earning money to pay toward your loans you may want to pay off certain loans first, such as the ones with higher interest rates, which can help you save some money on your loan. Contributing more than your scheduled payment can help you save interest.

Contact your servicer to learn how to apply for your additional money. Instead, they may just apply any extra payments and money toward the next month’s bill. You may also be eligible for student loan forgiveness if you work in a certain field for a specific period of time. In order to make sure you are on track to get this benefit, you need to work with your student loan servicer to determine whether the loans are eligible, whether you are in a repayment plan that is qualifying, and whether or not you have properly filled out the forms.

Choosing a Student Loan Servicer

You, unfortunately, don’t get to choose your loan servicer and are assigned one. If you have student loans from the federal government then your student loan servicer will be assigned by the Department of Education.

The servicer’s job is to help you keep your loans in good standing by giving you the resources and support you need. However, you need to know that they are private companies, which means they can offer choices that may not be the best for you. You have to also be your own advocate by knowing your different repayment options and asking questions when dealing with your student loan servicer.

If you have federal loans, you can exit the federal loan system and have a better chance of selecting your student loan servicer when you refinance your loans privately.

List of Federally Approved Student Loan Servicers

While you don’t get to choose a student loan servicer for your federal loans, when you choose a private student loan lender you are also choosing a student loan servicer so it’s important to choose a private student loan lender carefully.

When choosing a private student loan lender, the most important things to look for are fees and interest rates. In order to check this, you may need to do some shopping around. The rates you will find are just like other loans. And will depend on the market interest rate and your credit history. Some lenders require a co-signer, such as a relative or parent, who will also shoulder responsibility if you stop making payments. This means that your payment activity impacts their credit score, which is not something you really want to do to the co-signer. When looking at the costs for the private student loan lender, consider the interest, origination fees, early payment fees, and the lender costs.

It can be common to see either private or federal student loans transferred to a new servicer at any point, including in the repayment phase. Since the student loan servicer handles the transfer of the account it doesn’t affect your student loan terms. You will usually get electronic or mail notifications that your student loan is now being serviced by a new company. If this happens, you should continue making payments on time to the old servicer as instructed in order to avoid any late or missing payments.

What to Do Once You Find Your Student Loan Servicer?

Once you know who your servicer is you should then create an account on their site. In order to do this, you usually need to create a username or password. And then share relevant information, such as your Social Security Number, name, and address. You will also need to secure your account with some security questions. When you have registered, you are able to connect your bank information and then make payments directly. You are also able to send checks but it can be much easier to pay online.

There can also be other benefits to paying online. For example, you may get a reduction in your interest rate if you sign up for automatic payments. If you don’t want to sign up for autopay then see if you are able to sign up for online alerts so you are able to be reminded when a payment is due so you never miss a payment.

How Your Student Loan Servicer Can Help You?

Your student loan servicer can help you with many things once you track them down:

  • update your contact information
  • check your loan status
  • find details on payment amounts
  • help you make your payments

Being proactive about reaching out to your servicer and managing your loans is a good strategy to correct any issues, avoid errors, and help you keep your payments on track.

Forbearance with Your Student Loan Servicer

It is not unusual that you can not pay your student loan. According to some student debt statistics, the total amount of student loan debt in 2020 is over $1.67 trillion. If you are unable to pay your student loans then your loan servicer could suggest forbearance. Forbearance is the option to delay payments and you don’t have to make payments while loans are in forbearance. It sounds pretty great but it may not be the best option. While in forbearance, your loans still accrue interest. The interest is added to your balance once your loans are out of forbearance and you are back to making regular payments.

This means that unless you can cover the interest while your loans are in forbearance, your balance will be higher as you start to enter repayment. Since the interest keeps accruing, forbearance should be only temporary and a short-term solution and not a long-term solution.

Whether or not you can get forbearance from your student loan servicer will depend on whether or not your loans are federal or private. Federal loans will usually offer more generous forbearance terms than private lenders.

Not all forbearance terms are the same and for federal student loans, there are two types.

General forbearance can be an option for you if you aren’t able to make payments due to financial difficulties, medical expenses, an employment change, or other reasons. You have to apply for this type and the servicer has the right to deny the application at their discretion.

Mandatory forbearance is used in different situations when you are in a residency program or medical internship, an active National Guard Member, or your payment is more than 20% of your monthly gross income. If you qualify for this then the servicer isn’t able to deny the request.

In certain cases, your service provider can actually place loans in forbearance without you filling out a form. For example, forbearance can happen during a natural disaster when you aren’t able to make payments. There are other reasons why your account may be in forbearance.

While it can seem tempting to jump at the chance to not have payments for a time period, you should look at your situation before you make the decision. Why do you want to delay the payments? Are you looking for a long-term or short-term solution? Could deferment be a better option? If you decide that forbearance is your best option then it helps to make interest-only payments during this time period. The small payments that chip away at the interest will benefit you in the long run.

The less interest you get in forbearance, the less your principal will go up when you are done with forbearance. If you are placed in forbearance and you can actually make your payments then cancel your forbearance so you can work toward lowering your principal instead of letting it grow.

Deferment with Your Student Loan Servicer

This can be an option with your student loan servicer. Deferment actually excuses you from making a student loan payment for a certain period of time because of a condition in your life, such as hardship, unemployment, or returning to school. Unlike forbearance during this time, interest doesn’t accrue. You can usually qualify for deferment on a federal student loan if there are specific conditions and criteria for the loan time and you aren’t more than 270 days behind on your loan payments. You can defer student loans for only so long but usually, the maximum is for three years total. In order to apply, you need to send your servicer the right application and the necessary documentation. Your servicer needs to grant you deferment if you qualify but keep making payments until you are officially approved.

There are Different Types of Deferment Depending on Your Needs

  • In-School Deferment: This deferment is when you pause your loan payments while you are enrolled in college at least half time and the six months after you leave school or graduate. If you qualify then you should automatically get this but if you don’t, ask the enrollment office to send the information to the servicer.
  • Unemployment Deferment: In order to qualify for this, you will need to be unemployed and getting unemployment benefits, as well as diligently seeking full-time work. Many borrowers can get up to 26 months of this type of deferment but you will need to apply every six months.
  • Economic Hardship Deferment: You can qualify for economic hardship if you are getting federal or state assistance, such as through Temporary Assistance for Needy Families, or if you are not working full time and earning a monthly income of less than the poverty guidelines for your state or volunteering for the peace corps.
  • Military Deferment: If you are on active military duty then you can postpone payments. Your service needs to be related to a military operation, national emergency, or war in order to qualify. You are able to qualify for this deferment as long as you are on active military duty. You are also able to use it for 13 months after the service ends or you return to school.
  • Cancer Treatment Deferment: Cancer patients that have student loan debt can also get a deferment during treatment and for six months following the conclusion of treatment.
  • Other Types of Deferment: Other private lenders will also let you defer student loans while in the military or school. Be sure to contact the lender for eligibility details and to find out how to apply.

Deferment on Private Student Loan Cost More
If you have private loans then student loan deferment can be expensive. These loans may accrue interest during deferment and you will be responsible for paying it. If you don’t pay this while your loans are in deferment then unpaid interest is added to the loan balance, just like forbearance.

Income-Driven Repayment with Your Student Loan Servicer

If you are worried about affording payments in the long run and deferment or forbearance isn’t an option for you then an income-driven repayment can offer some immediate relief and some other benefits:

  • You Will Likely Pay Less Every Month: Many factors factor into how your payments are calculated. If you are deferring loans because you don’t earn a lot of money then your payments could be as low as $0, which is basically the same as pausing them altogether.
  • You Can Save on Interest: A big benefit of deferment is not paying interest on any subsidized federal loan. However, most income-driven pans also waive the costs if your payments don’t pay for your accrued interest. This will last for three years, which is the same as economic and unemployment hardship deferments.
  • You May Get Loan Forgiveness: After 20 to 25 years of payments, income-driven plans will forgive the remaining balance on your payments. And forgive any remaining balance on your loans. Instead of pausing payments for three years with deferment, you could be paying under an income-driven plan and be closer to forgiveness than with deferment.

It’s possible that you will pay more interest overall on an income-driven repayment plan since these plans extend your repayment term. Use a repayment estimator to calculate short- and long-term costs. Then you can see if this is the right plan for you compared to deferment or forbearance.


Sometimes, with a good interest rate, personal loans can help you to get out of debt. But this is for some other story. While you may not have a choice in your student loan servicer, finding the servicer is an important part of getting your loans repaid. Working with your servicer is going to be in your best interest in order to make sure that you get your loans paid and to find the best repayment plan for your needs, whether it’s forbearance, deferment, or an income-driven repayment plan.


What Student Loan Forgiveness Options are Available?

A few days ago, I received a notice in the mail that my student loan payments are coming due. I had been dreading the payments for years, but I was honestly shocked at the amount of my monthly payments: $1153.35. Who has that kind of money left over each month? Not me. I do not mind paying what I owe, but good grief, that is more than I can handle at once. I am on a mission to figure out another way, and I want to share my research with others in my predicament. We are going to take a look at ways to prevent needing student loans, student loan forgiveness, and alternative repayment options.

What Are Loan Forgiveness Programs?

You hear about student loan forgiveness programs all the time, but it really is not what you think it is. In fact, if you call most of those places that offer loan forgiveness, they are actually loan consolidation places that want you to pay them to consolidate your loans. The only way to get any kind of student loan forgiveness is through the federal government’s approval, but it is not so easy.

Most student loan forgiveness programs are only available after a set amount of years of payments- yes, years. For instance, some student loan forgiveness programs only apply after 20 or 25 years of on-time payments. If you are screaming, “But I can’t afford my loan payment,” it’s okay. In a moment, we will talk about getting those payments lowered until you qualify for forgiveness.

It’s important to note that besides the term forgiveness, terms ‘cancelation’ and ‘discharge’ are also used. They essentially mean the same thing, but are used in different contexts. Forgiveness and cancellation is used when you’re no longer obliged to make payments because of your job. In other circumstances, such as permanent disability, discharge is used.

What Happens If I Do Not Pay?

Before we look at student loan forgiveness and repayment alternatives, let’s be clear on how non-payment of loans can hurt you. It goes beyond showing up on your credit score. These are federal loans we are talking about. The federal government has the power to get their money back in any way they can. This means that if you do not pay, they can garnish your wages– something most people cannot afford. They can also keep any tax refund payments you should receive. It just is not worth the risk. Instead, put in the work to get one of the following options working for you.

Types of Forgiveness/Cancellation/Discharge

Here’s an overview of different types of forgiveness available to you if you qualify.

Public Service Loan Forgiveness (PSLF)

This type of forgiveness is for people who choose to work in public service jobs and used direct loans. It does not kick in immediately, though. You will still need to make 120 payments- that’s about 10 years. However, if you do this, you qualify for 100% forgiveness.

Teacher Loan Forgiveness

If you are a teacher and work at a qualifying school for a minimum of five consecutive years, you can receive anywhere from $5,000 to $17,500 in student loan forgiveness. This is only available for users of direct and FFEL Program loans.

Perkins Loan Cancellation and Discharge

This is available only for Federal Perkins Loans and you can get a portion or the entire loan discharged or cancelled.

Total and Permanent Disability Discharge

If you’re an individual with total and permanent disability, you may qualify for this discharge type. You need to have a direct, FFEL program or Perkins loan.

Closed School Discharge

You may be eligible for discharge if your school closes while you’re attending it or soon after you’ve withdrawn.

There are several more options due to death of the borrower, bankruptcy, false certifications and more. For more information, make sure you visit StudentAid.

How Do I Qualify for Student Loan Forgiveness/Cancellation/Discharge?

By visiting, you will be in front of a wealth of information about student loan forgiveness and repayment plans. By filling out some information, you should receive a summary of what you can qualify for. This will also show you your student loan balance and let you control some parts of payments you make.

What Do I Do If I Do Not Qualify?

Even if you do not qualify for student loan forgiveness, you can likely qualify for much lower repayment plans. These include:

  • Income Based Repayment (IBR)
  • Pay as You Earn (PAYE)
  • Income Contingent Repayment (ICR)

Each of these can help lower your payment. Some people will even qualify for payments as low as $0 per month, but you have to recertify, usually once per year.

Student Loan Consolidation

If you do not qualify for student loan forgiveness, another option you have is student loan consolidation. You can shop around for a loan company that will offer a lower payment and lower interest rate. You will still be paying your payment every month, but it will only be one payment. And it should be way less than my $1153 payments, especially if you shop around enough. In fact, loan consolidation may give you a much longer repayment period. If there are no other options in your path, take a look into consolidating your loans.


Trying to repay your student loans can be stressful, especially when your payments are more than your monthly rent. Fortunately, there are options that can help borrowers pay back with more ease. Take some time to research options available to you and apply. Always keep loan consolidation on your mind in case no other options work out as you need them to.