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Repay Student Debt

115 posts

Yes, you read that title correctly.


‘Tis the season to be thankful, and although it seems insane, I’m occasionally thankful for my student loan debt—emphasis on the “occasionally” part of that sentence.


To be explicit, I am not saying that everybody should feel similarly (though some do, apparently). Debt sucks, and historically, my way of dealing with suckage has been to find the silver lining buried beneath the gristle. It’s more coping than anything else, and I understand if you cope differently.


Anyway, here’s why I’m thankful.


Nothing Else Could’ve Made Me Grow Up Faster


Debt ages you—fast. Growing up, I always remember my parents telling me that I “didn’t understand the value of a dollar.” And though I’d never admit it, they were right. I came from an upper-middle class family: Most things I wanted, I could have.


Boy, did I get a rude awakening when that first loan payment hit.


I was living in New York City at the time. Suddenly, things that had never seemed hard before, like buying groceries and paying utilities, became difficult. I had to stop eating out and getting drinks frequently because if I didn’t, I’d be living paycheck-to-paycheck each month.


My parents’ advice finally made sense to me when I had to make some hard financial choices. I stayed in more than I wanted to, traveled less, and had to get thrifty to make it all work


But from that day forward, I never spent money needlessly again. Ironically, I was worried about my more privileged friends who didn’t have student loan debt. When would they learn the lesson? Would it take crippling credit card debt or a home foreclosure?


It Made Me Hungrier


Watching my paychecks go toward a debt payment every month made me more ambitious in my career. I remember talking to debt-free friends about how eager I was to get promoted, to take on more. They were always confused: Why was I in a rush to do more work? Because more work meant more money, and more money meant fewer years dealing with a black hole of debt.


I’ve grown my career aggressively the last few years to gain new skills, take on more responsibilities, and ultimately, become more valuable. And while I’ve learned many a lesson on slowing down (for both work and health quality) along the way, I’ve still got a long way to go. And I don’t plan on stopping anytime soon.


It Gave Me Perspective On Education


Having student loans made me realize just how hard carrying education debt is. After undergrad, I watched friends go off to medical, law, and other graduate schools. While some were following their dreams, others seemed to fall into these programs to give their post-graduate lives some structure. It was a reason to delay entering the ambiguous (and therefore scary!) world of careers.


Not me. I had to dive headfirst into a career and figure it out on my own. I’m glad I did.


Every industry is different, but in tech, skills and executional ability are all that matter. Going straight to work made me realize that more higher education could be helpful to me, but it was by no means a necessity. 


Had I not worked right after undergrad, I think I would’ve made an assumption that a lot of people do: that more degrees would mean more money, more success, more everything. 


For me, another degree is a luxury, not a necessity. And while I’m not ruling more education out of my future quite yet, getting burned by the student loan monster once has made me reluctant to try again.


Have you found a silver lining in your debt to be thankful for? Sign up or log in with your Salt account to let me know in the comments. 

With about $1.3 trillion in outstanding loans, student debt is the second highest debt category behind mortgages. It surpasses both credit card and auto loan debt. And with grace periods for many new grads ending this month, the number of borrowers dealing with that debt is about to increase.


This also means that many borrowers will hit their repayment “anniversary” in November. Regardless of whether you’ve been in repayment for days or years, one thing remains true for all borrowers: Paying off large sums of debt can be an extremely emotional process. Because of this, it can also lead to debt fatigue.


What Is Debt Fatigue?


According to Investopedia, debt fatigue is when a borrower stops making payments on his or her debt and starts spending again because repayment seems pointless. In the case of student loans, it could look like the borrower becoming far less aggressive in paying down their loans, or letting loans drift into delinquency or default.


One of my friends, Melanie Lockert of Dear Debt, went through this herself. She had loans in the amount of $80,000, which took her a total of 10 years to pay off. At one point, they seemed so emotionally daunting that she lost steam paying off her loans. She overcame this and actually ended up paying back the majority of those loans in about 4 years. As of 2016, she is completely debt free.


Debt fatigue usually comes as a result of the overwhelming feelings associated with debt repayment. The bad news is that this is quite common and can throw a wrench into your debt repayment plan. The good news you can do two things to snap out of it.


1. Focus On How Far You’ve Come


As with anything in life, focusing on how far you’ve already come in your debt repayment journey (as opposed to how much you still have to repay) will help you get out of a funk.


Because of negativity bias, our brains are hardwired to find the negative in things. This comes from eons of needing to survive as a species. Therefore, it’s our job to consciously choose to look at the positive. This will help give you the motivation you need to keep moving forward.


2. Find Supportive People


One thing I’ve noticed as a financial expert is whom you hang out with matters. It’s very difficult to take on a big feat like debt repayment if the people around you are not supportive. It’s also important to surround yourself with positive examples of people who are also trying to pay off their loans.


Fortunately, several resources are available for this, starting with this community. There are also bloggers with communities such as Dear Debt and Debt Free After Three—both of which focus heavily on helping people with student loan repayment.


Have you ever experienced debt fatigue? What did you do to overcome it? Sign up or log in with your Salt account to share your tips below.

I constantly change my mind when it comes to managing my student loans.


Sometimes, I envision saving up a ton of money and taking them out in one fell swoop. Other times, I see myself cutting the term of the loans: My monthly payment goes up, but I pay everything back a lot quicker. And, other times still, I see myself continually refinancing them—extending the loan term and shrinking my monthly payment each time.


I refinanced most of my private loans back in 2015. In doing so, I extended the loan term and made my monthly payment a lot easier to manage. I’ve been contemplating another bout of refinancing lately, but I’ve been stalling because there are strong arguments both for and against it.


Here’s what I’m struggling with.


Refinancing: Short-Term Gain, Long-Term Loss?


If I were to refinance again, I’d do so for two reasons: extend my loan’s term and get a more favorable interest rate. In this scenario, my monthly payment drops, which is great. I’d have more cash available month-to-month and be less budget constrained as a result.


As I’m still earlier in my career, my income has increased rapidly these last few years. If that trend continues and I keep repeating this refinancing strategy, my monthly student loan payment might eventually be such a low portion of my total monthly income that it’d become negligible.


The cons here, though, are pretty obvious: I’d extend my own suffering so to speak. My loan term would reset with every refinance. The total amount I’d pay back over the (constantly extending) lifetime of the loan would likely increase, too. Neither of those things sounds particularly appealing.


Don’t Refinance: Stay In It For The Long Run?


Alternatively, I could keep my loans on the same term and pay as I have been. If my theory above about my income holds true, the monthly payment would still become a smaller portion of my total income (though far more slowly) and my repayment period clock would keep on ticking. I’d also minimize the total lifetime cost of the loan this way (or at least not increase it).


The con here is trading off the short-term benefits of being more liquid month-to-month. Having more cash available would make hitting my budget every month a lot easier and let me invest in other types of savings beyond what I’m already doing.


My Decision Timeline


I’m aiming to make a decision on this front early next year. At that point, I’ll have given myself enough time to weigh the various options. I’ll also hopefully have a better idea of what my 2018 will look like in terms of professional and personal goals.


I’d love input from folks in the meantime. What would you do if you were me in this situation? Sign up or log in with your Salt account to let me know in the comments!

For federal student loan borrowers, Halloween marks a frightening milestone: the end of their student loan grace period. Once November hits, most college graduates face their first student loan payment—and that may be even scarier than ghosts or goblins for a few reasons.


But this doesn’t have to be the case. Let’s unmask three common student loan fears that borrowers may have, because no one should be afraid of their loans.


1. Fear Of The Unknown


Student loan debt has risen above $1.4 trillion. The news features countless horror stories of those who can’t repay their massive debt. And new grads have likely had friends and family share their own frustrations with repaying student loans they regret borrowing.


Just like how local legends can linger in your mind when driving down that dark road through the woods, these student loan stories may lead you to dread repayment—especially if these loans are your first form of debt. But that fear is not necessary because there’s tons of help available for borrowers.


Federal loans have a wide variety of repayment options to fit into your budget. Plus, they offer postponements if you temporarily can’t afford to make your payments, and your loans could be wiped away after unfortunate circumstances or if you perform eligible service. This is the info new borrowers should know, not the scary stuff.


2. Fear Of Expensive Payments


For many teenagers entering college, the loans you borrow are so large that they can feel more like Monopoly money than real dollars. Once you graduate, your balance suddenly becomes terrifyingly real.


Being responsible for five or six figures of debt may make your heart race, but don’t run from it. Concentrating on the total you owe at this point is counterproductive. The better is evaluating how the debt will affect you month to month.


Go to the Repayment Estimator to find an approximation of what your payments would be under all of the federal repayment plans. Some will be the same amount over a period from 10 to 30 years, others will start low and increase over time, and some will be based solely on your income and family size. This calculator will also estimate how much you will repay overall.


Depending on your priorities, you can choose a plan to lower your payments each month to a manageable level, or to pay the least overall.


3. Fear Of The Government Taking Your Money


Whether it’s been someone you know, someone on the news, or a social media post, everyone has heard about at least one person having their wages, Social Security payments, or federal tax refunds seized by the government to repay federal student loans.


Though these stories are likely true, you may be spooked for no reason. The government isn’t a ghoul trying to steal your money. The above situations can occur, but only under unique circumstances.


When you miss 270 days of loan payments, your loans go into default. Loan holders will try to contact you before and after this happen. If you don’t respond—and continue to be unresponsive—the loan holders may take harsher actions. For instance, they can garnish up to 15% of your wages.


Any federal payments may be garnished as well, which includes Social Security payments and federal tax refunds. Both processes are put into motion months in advance, and a notice is sent to you. If you respond to this notice in a timely fashion, the garnishment can be stopped. It just takes you working with your loan holder to get your loans out of default.


If you’re still spooked by your student loans, let me know what your fear is so that we can deal with it before trick-or-treating starts. Sign up or log in to share it below. Happy Halloween!

One of the most common questions I’m asked is how to get student loans out of default. At this point, I can cover the three options without thinking much about them:


  1. Pay the loan in full
  2. Consolidate it
  3. Rehabilitate it


But that doesn’t mean you shouldn’t think about them! Each option has its pros and cons, and which you choose will depend on your unique situation. Here’s which could work best for you.


Payment In Full

This option is best if: you owe a small amount, or you’re rich (yeah, right ...)


When your federal student loans default, your entire balance comes due immediately. If you are able to pay in full, try to do so as soon as possible.


You have a 60-day window after you receive the default notice to avoid collection costs if you make satisfactory repayment arrangements. Though no longer required, most federal student loan holders have agreed to this procedure. This also goes for consolidation and rehabilitation.


If you pay the loan in full after the 60-day window, you’d need to pay collection costs as well. These will depend on your loan holder and the activities they performed, but they could be up to 24% of your balance. So, if you default on a relatively small amount, see if you can find some money to pay it off immediately instead of dealing with those extra charges.



This option is best if: you’re trying to return to school quickly


Consolidation is another quick method to get out of default. You can do this by either consolidating and agreeing to repay with an income-driven repayment plan or by making three consecutive, voluntary, on-time, monthly payments and then consolidating.


This would be your best option if you needed to enroll in school within the next couple of months, but can’t receive new federal loans due to your currently defaulted student loans. If your wages are being garnished, this would also cease after the consolidation is complete.


If you choose consolidation, you would incur collection costs of up to 18.5%, which would be capitalized (added to your loan’s balance) at the time of consolidation.



This option is best if: you want to wipe your credit history clean


With rehabilitation, you make nine on-time, monthly, voluntary payments in an agreed upon amount within 10 months. Once you make all of the payments, your loan is sold to a new lender and taken out of default.


At that point, the default line is removed from your credit report. This can be a big help if you’re want to get approved for consumer debt, such as a car loan or mortgage, in the next 7 years (the amount of time the default would otherwise stay in your credit history). Consolidation does not remove the default line from your credit report.


You can regain federal loan eligibility after making six payments under a rehabilitation agreement, but the loan is not out of default until you make all nine payments. Wage garnishment will also cease after five payments (contact your loan holder if the garnishment continues). You can only rehabilitate loans once.


The amount of collection costs charged will depend on the type of loans you have, but will typically not exceed 16%. Any interest and collection costs incurred during rehabilitation will not be capitalized.


Still trying to figure out which option is right for your situation? Sign up or log in with your Salt account to post in the comments, and I’ll help you figure it out.

On September 1, the Public Service Loan Forgiveness application was published—120 months after the program was introduced in October 2007. This means you can now apply for forgiveness if you’ve made 120 qualifying payments. Since this process is completely new to us all, let’s go over some information about applying for PSLF.


Quick PSLF Refresher


PSLF was created at the end of the Bush administration to encourage graduates to go into needed public service and nonprofit fields that may not offer competitive compensation with for-profit entities. It forgives the remaining balance on your federal Direct loans after you make 120 eligible, full, and on-time monthly payments while working full time for an eligible employer.


Learn more specifics about the program here, or check out one of our PSLF webinars. We will hold them at least twice a month until the end of the year.


PSLF Application Forms


Remember all of those times I’ve recommend you complete the PSLF Employment Certification (EC) form? This is when it comes in handy. You must complete the new PSLF application as well as an EC form(s) to cover all your eligible months of service.


This is completely your responsibility. You are not eligible at this time if you cannot get your employer or previous employer to complete the form and certify you worked full time during each month of employment. Once you have EC forms covering 120 months of eligible service, you can apply for PSLF.


Additionally, you must complete an EC form when you apply for PSLF. This is because you must still be working full time for an eligible employer at the time of application.


PSLF Application Process


Once you submit a completed PSLF application to FedLoan Servicing (the federal loan servicer that will process all PSLF applications), you will be notified that your loans will be placed in an administrative forbearance. This doesn’t mean your application is approved. Rather, you are just not required to make any payments—though you may want to until you’re officially approved.


Because this is a new process, it is unclear how long the approval decision will take. You may be required to provide further employment information beyond the EC form, which will slow down the process. If you submitted EC forms previously to cover portions of your service, your application will likely be processed faster.


You will be notified once FedLoan Servicing makes a decision on your application. If you are approved, your loans will be forgiven tax free. You will receive a refund for any payments you made after you were notified that your application was submitted. If you are denied, you will be placed back into repayment and any interest that accrued during the forbearance period may be capitalized.


Hopefully, I’ve answered your questions here. If not, check out Federal Student Aid’s Q&A or sign up or log in with your Salt account to post your questions about applying or qualifying for PSLF below.

My heart goes out to anyone affected by the recent hurricanes. During times like this, your first priority is your and your family’s safety, then picking up all the other pieces. You may find some helpful resources regarding assistance here.


The least of your concerns should be your federal student loans or your in-school deferment if you’re in college. Thankfully, provisions for both of these issues are available for those in federally declared disaster areas. Check this Federal Emergency Management Agency’s (FEMA) site to determine if you live or go to school in a qualifying county.


Emergency Response Contact Center


In response to the hurricanes, the U.S. Department of Education has created the Emergency Response Contact Center. You can contact the center by calling 844.348.4082 or emailing or if you were affected by those storms and are looking for educational informational resources.


The phone number is a hotline, which will prompt you to leave your information to be called back. If you know who your loan holder is, you can contact them directly for more information or call 800.433.3243. You can also contact a Federal Student Aid Ombudsman at 877.557.2575.


Student Loan Assistance


If you’re affected by these hurricanes (or any other natural disaster), loan holders automatically place non-defaulted student loans in a 3-month forbearance.


If you don’t need this forbearance (remember interest accrues during the 3-month period and capitalizes), contact your loan holder directly to cancel it. They will send you a notice about it being applied.


If you have defaulted loans, you or a reliable source will need to request the 3-month forbearance from your loan holder.


College Students


If your college attendance has been interrupted due to the hurricanes, your federal student loans will remain in the deferment status until you re-enroll in the next term or withdraw. If you don’t re-enroll, your deferment will conclude on the start date of the term. Any grace period time you are eligible for will begin as of that date.


I’m thankful I don’t need to write blog posts like this often, but I want to offer any guidance I can. Please let me know if you need any more information about how to handle your loans during this time, or what to do if you are unable to attend school. I’ll update this post further if any new information becomes available.


Sign up or log in with your Salt account to post your question.

Wouldn’t it be nice if to forget about interest and pay just the amount you actually borrowed? Many people ask me how to do that.


Unfortunately, almost all borrowers pay at least some interest. You can decrease this amount, but it takes some planning and attention to detail—not just a bigger check.


How Interest Works


Interest accrues on the principal balance of your loans every day. It’s the cost of borrowing the loan, and much of where your lender’s income comes from. The more you pay the principal down, the less the interest accrues, and vice versa.

The faster you can pay down your principal, the cheaper your loan will be in the long run due to smaller amounts of interest accruing daily. So, can’t you just put some extra money toward the principal to speed up this process? Not exactly.


How Payments Are Applied


Lenders apply your payments in a federally regulated fashion. First, your money goes toward fees (like late fees), then toward accrued interest, and finally toward principal.


So, if your payment is less than the amount of interest accruing every month, none of your payment will reach your principal. This is fairly common with income-driven repayment (IDR) plans.


This also occurs if your loans default. In this instance, collection costs are added to the loan, and you need to pay them off before interest and principal. Some borrowers might see their principal not go down until they repay all of the fees and late interest from the delinquency period.


What To Do


There’s no getting around how loan payments are applied to your account. If you want to apply more money toward your principal, you’ll need to make a payment that is more than the accruing interest. You’ll also need to make sure your loan holder knows what you are up to.


When loan holders apply extra money to federal student loans, they automatically apply the extra money to your next payment—potentially pushing your next due date back a month, depending on how much extra you paid. Again, this is set in federal regulations.


Here’s an example: Your payment is $100 and is due on September 1. You make a payment of $200. Instead of that extra $100 going directly to your principal balance, your next due date will be November 1. This leaves you without any cost savings, but it gives you a bumper month if you were to need it.


Here’s the trick if you’d prefer the cost savings: You just tell your loan holder how you want the money applied. You may be able to do this online, or you may have to call or email your loan holder directly with instructions. Whichever route you choose, follow up to make sure they actually apply your extra payments correctly—that’s not always the case.


What questions do you have about how your loan payments are applied? Sign up or log in with your Salt account to post them in the comments!

Borrowers ask me a lot (I mean, all the time) whether a student loan company that has contacted them is “legitimate” or a “scam.” Most of the time, I’ve never heard of the company—or it sounds almost like a well-known organization in the student loan industry.


Without doing some research, I can’t say if it’s a scam or not. Luckily, our friends at NerdWallet have done that homework for us. They have compiled a list of debt relief companies with questionable services or unreasonable rates. You can learn about how they determined this list here.


Now, I was not involved with the creation of this resource (and I’m definitely not getting paid to promote it), so I can’t say without a doubt that every company on it is a bad actor. But I am naturally inclined to be wary of debt relief companies. Here’s why.


What Debt Relief Companies Do


We’ve cautioned you before (more than once) against paying companies to manage your student loans for you. I’m not trying to beat a dead horse, but I can’t stress enough how careful you need to be when you decide to work with one of these debt relief companies.


Legitimate debt relief companies can do things for you like apply for consolidation, income-driven repayment, or payment postponements. The problem is that you can do all of these on your own for free—as opposed to paying large, lump-sum fees or monthly fees (or both).


A company charging for such services isn’t doing anything unsavory, but there are bad actors that are. Just because a company is not on NerdWallet’s list doesn’t mean it has to be a good company.


Additional Warning Signs


I advise steering clear of any company that contacts you advertising that it will:


• Forgive your loans immediately without proof of income, employment, or discharge eligibility.

• Reduce your monthly payments to $0 without your income information.

• Reduce your interest rate on federal student loans.


No company can do these things for you. And I will never recommend working with companies that make unrealistic promises or demand upfront payment.


Do you have questions about a company you’re working with or have been contacted by? Do you have any experience with debt relief companies you could share with us (good or bad)? Sign up or log in with your Salt account to let me know.

The Center for Consumer Advocacy (my group) at American Student Assistance® (the company that powers Salt®) kicked off a Public Service Loan Forgiveness (PSLF) campaign this summer: 10 Years to Zero Debt. The intent of our campaign is to educate more people about PSLF and boost enrollment in the program. Ideally, we want to get 100,000 people to take action. You can follow the campaign on Twitter (#10YearsZeroDebt).


PSLF is a federal student loan forgiveness program that erases your remaining balance on federal Direct loans after you make 120 eligible payments while working for an eligible nonprofit or public service employer. We’ve talked a lot about PSLF over the years (you can learn more here and here), but I want to focus on the issues borrowers face with their eligibility for the program.




The Consumer Finance Protection Bureau (CFPB) estimates that 25% of the workforce is working for a PSLF-eligible organization. That’s about 33.6 million people! But, according to FedLoan Servicing, only 1.06 million PSLF Employment Certifications (EC) have been submitted. This is only 3% of that population.


Now, not everyone in the workforce has student loans, but FedLoan has also reported that 33% of PSLF ECs are denied. That is unfortunately a lot of people. That’s why I want to give you some tips on what NOT to do to ensure your application is approved.


Are You Eligible?


This can be a stumbling block for many people. Remember, to be eligible for PSLF you must:


• Work full time for an eligible nonprofit or public service employer.

• Have federal Direct loans (or consolidate other federal loans to become eligible).

• Repay under an eligible repayment plan (i.e., standard 10-year, IBR, ICR, PAYE, or REPAYE).

• Make 120 eligible payments in no less than 10 years (exception for Peace Corps, AmeriCorps, and Department of Defense student loan repayment recipients).


If you aren’t meeting every one of these, your application will be denied.


Common Mistakes


A third of PSLF ECs have been denied (349,701). Many for simple mistakes on the form. Here are the most common (and avoidable) mistakes that will cause you to have your application denied:


• You left a blank end date for your employment dates instead of selecting that you are still employed.

• Not checking box 15 certifying the accuracy of the information on the form. (Just like accepting the terms and conditions of your iTunes account by checking a box.)

• Missing required fields such as the federal employer identification number (EIN).


You can’t officially apply for forgiveness until September, but you can get your PSLF EC forms signed annually to ensure you have an accurate record of your eligible payments for when you do apply.


Does PSLF still confuse you? Do you have questions about how to apply or why your applications was denied? Sign up or log in with your Salt account to ask them in the comments.

Back in November, I wrote about new regulations for the borrower defense to repayment (DTR) federal student loan discharge. This wasn’t a new discharge, but borrowers have rarely used it due to tough qualification standards.


DTR helps borrowers whose colleges defrauded them or violated state consumer protection laws. And with the collapse of Corinthian Colleges in 2015, it rose to the forefront as a sorely needed option for affected borrowers.


Unfortunately, unlike more commonly used discharges, virtually no procedures existed for DTR. So, the Department of Education worked not only to streamline a process for this discharge but also to open it to a larger population of student loan borrowers.


New regulations were negotiated and set to take effect on July 1. However, on June 14, new Education Secretary Betsy DeVos announced that the DTR regulations would be “indefinitely delayed.” With over 82,000 DTR claims submitted already, what does this mean for borrowers?


New Negotiations


Advocates for the revised rules believe that they would protect students from predatory college practices and taxpayers from footing the bill from massive school closures like the case of Corinthian or ITT Tech. Opponents of the revised rules say they go too far, are onerous, and will cause schools to close their doors.


At this point, it is unclear how the DTR rules will change. But to start this process, the Department announced two public hearings. These are scheduled for today (July 10) in Washington, DC and July 12 in Dallas. Whatever side you are on, you can have your voice heard on the subject if you’re in those areas on those dates. (If you’re in DC, look for me because I’ll be there!)


The Department also announced an upcoming negotiated rulemaking session on these rules. So while the debate on DTR restarts, don’t expect a resolution anytime soon. New rules will likely have an effective date of July 1, 2019.


Current Rules


Affected borrowers can still receive relief through DTR before those new rules go into effect—remember, this discharge currently exists. Meeting the application criteria is not easy, though.


Direct Loan borrowers must demonstrate that their school defrauded them by violating a state consumer protection law. Federal Family Education Loan (FFEL) borrowers must demonstrate the same AND show that the school had an improper relationship with the lender of the loans.


Oh, and each state’s statute of limitations applies, too—typically 6 years.


Borrowers Looking For Relief


Though not impossible, it’s not going to be easy to prove your DTR case unless you have something in writing showing how the school defrauded you. If you went to school years ago, this becomes more and more difficult.


If you think you may be eligible, collect all documentation from the school you can: letters, advertisements, emails, anything. You can then apply by email or mail at U.S. Department of Education, PO Box 429060, San Francisco, CA 94142.


If you’ve already submitted an application, I can only ask you to be patient. The Department is working on them, but there is a serious backlog.


What questions do you have about DTR? Sign up or log in with your Salt account to post them in the comments.

As of this month, I’ve been paying my student loans exactly 3 years. Three years isn’t that long a time, but for some reason, I feel like I’ve had my student loans for an eternity. I think it’s the fact that so much life has happened for me in those 3 years: three new jobs, three new cities, and everything in between. Now, the road between where I started and where I am feels a lot longer than it actually is.


In these 3 years, I’ve changed my strategy toward student loan repayment quite a bit. Some may view that as a sign of instability and indecisiveness, but I think of it as being comprehensive. You can only know what works best for you until you try out all (or at least quite a few) of the available options.


Here’s a recap of my trials and tribulations with student loans, and what the plan ahead looks like—for now, at least!


Year 1: Big City, Little Budget


When I first graduated from school, my loans were a major source of anxiety. There were so many of them, and compared to what I was getting paid, I didn’t know when I’d ever be able to pay them all back.


Regardless, I didn’t let them detour my career dreams. I moved to New York City to work at an ad agency. And while I had a blast there, money was really tight each month. Like, needing to skip a few meals tight every month. I knew the lifestyle I was living wasn’t sustainable.


Rather than try and adjust my life in New York, I took a promotion at my job that moved me back to Boston—my hometown.


Year 2: Back to Square 1


I had lukewarm feelings about moving back to Boston. I was excited to see my family again, but returning to the city I grew up in felt wrong somehow. How did I do all the “right” things, and manage to end up back where I started?


Regardless, I tried to turn it into an opportunity. I moved back home, because renting an apartment in a city where my parents lived seem financially foolish. My loan repayment strategy did a complete 180: I went from paying the minimums to making double payments. I made a promise to eliminate all my debt in 5 years.


But, I underestimated my own wanderlust—and potential career growth. A year into life at home, Facebook approached me with an opportunity that I couldn’t refuse. I packed my bags, and moved across the country to San Francisco to chase a dream job.


Year 3: Sunshine Dreams


This year has been a great one for me. I love my job, and I am learning a ton. San Francisco is a beautiful city, and a place I could see myself living for a while. Thankfully, I make more than I did when I lived in NYC, so I’m able to make loan payments without my budget feeling so constrained each month.


And, the future looks a lot brighter. I’m optimistic about my future career growth, and the financial benefits it may bring. While I’m not optimistic (or is it idealistic?) enough to revive the 5-year repayment promise, I’m confident I’ll have my loans paid back before their repayment terms are up.


On paper, it’s not the smartest decision: The longer you take to pay back a loan, the more interest you pay. I acknowledge it’s not perfectly logical. But, neither are people.


I made decisions that maximize my future personal and professional growth—and my current happiness. These decisions don’t maximize my financial efficiency. And I’m ok with that. Maybe you won’t be, and that’s fine, because that’s the point.


There’s no out-of-the-box formula for student loan repayment. You need to do what works best for your current life and your future. Only you can understand either of those things. Do what feels right.


Do you have a repayment story to share? Sign up or log in with your Salt account to let me know in the comments.

It’s easy to feel overwhelmed by student loans. As a Salt® student loan counselor, I talk to a lot of people who feel like this. And one thing they commonly ask me is, “What happens to this loan if I die? Will my family get stuck with these payments?”

So, let’s talk about what happens when you die.


(Just to your student loans. Don’t worry. I’m not going to bring up religion or philosophy.)


An Important Note


Debt can easily lead to depression. If you’re struggling financially and emotionally, as a result, please get help right away—and not just with your student loans. There are always options. Call the National Suicide Prevention Lifeline at 800.273.TALK (8255) for support.


Death Discharges


Death is right near the top of the list of things you’re not “supposed” to talk about, but being concerned about your family is reasonable and responsible—especially if you’re worried about leaving them with a lot of debt. And in this case, the reality is pretty reassuring.


Federal student loans are discharged when the borrower passes away. Your family, spouse, or estate would not be responsible for the remaining balance. (They would just need to provide a certified death certificate to the loan servicer.)


Private student loans are more complicated. Some lenders offer a death discharge. (Check your loan’s paperwork to see if you loan does.) Beyond that, it depends on whether you had a co-signer or co-borrower, where you live, whether you’re married, even when you got married.


But most often, your student loans will not outlive you. Hopefully, this will relieve some of your anxiety.


What questions do you have about death discharge for student loans? Sign up or log in with  your Salt account to post them in the comments below.

I hear this a lot as a Salt® student loan counselor—especially this time of year, with borrowers losing their tax refunds to defaulted student loans. The truth is, loan servicers always try to contact you if your loan is delinquent and drifting toward default. Unfortunately, the contact information they have might be out of date.


Are you still using the same address, phone number, and email address from when you started school? If not, you might not get the information you need to stay in control of your loans and protect your credit. You can easily fix this, though!


Get In Touch With Your Loan Servicer


Make sure they’re able to contact you. If you’re not sure how to contact them, go to the National Student Loan Data System (NSLDS®). That’s the federal government’s central database for student loan information. There, you can find out who is servicing all your federal student loans, as well as how much you owe and other important loan details.


When They Do Contact You, Pay Attention


Now that you know your servicer, be on the lookout for information from them. Check your spam filter once in a while. And if you get a phone call from a number you don’t know? Well, to be honest, I don’t always answer those calls either. But at least listen to the voice mail.


“But I don’t need to open all their emails. I’m still in school.” I hear that a lot, too. Maybe they’re emailing you because they don’t know you’re in school. Perhaps you’re just taking one class or “taking a semester off but going back in the fall.” In these cases, you’d be enrolled at less than half-time status. That means your grace period would have already begun, and after that, repayment starts.


Know Your Options


If you stay informed and in contact, you’ll have a better chance of staying out of default. You have options to pull your loan out of default (rehabilitation, consolidation), or avoid it altogether depending on how late your payments are. But ignoring the situation and your servicer definitely won’t help things.


What questions do you have about student loan default? Sign up or log in with your Salt account to post them in the comments.

One of the biggest choices any student has to make about their federal student loans is whether to consolidate or not. Consolidation is a very popular option, but it’s also one that people frequently request without fully understanding the consequences for it.


Consolidation allows you to combine multiple federal loans into one big loan. There’s no fee to consolidate online at, so be careful not to pay an unnecessary fee to a third-party debt relief company for this. The consolidation essentially replaces your existing loans with one big, new loan, with an interest rate based on a weighted average of the rates you already have.


Why Should I Consolidate?


There are plenty of great reasons that people decide to consolidate their loans:


  • Simplicity. By the time you finish your education, it’s possible to have many different loans, possibly even spread out among different companies. Consolidation lets you put them together into one place, handled by one servicer.
  • Updating your loan. All new consolidations are through the Direct Loan program. If you have older federal loans and want to apply for Direct loan-only options like Public Service Loan Forgiveness or the Revised Pay As You Earn payment plan, you may need to consolidate into the Direct Loan program.
  • Reducing your standard plan payments. Depending on the amount you consolidate, this option will stretch out the term of the standard payment plan up to a possible maximum of 30 years. This means consolidation will usually lower your monthly payment amount.

All of those look like pretty good benefits!  So, what’s the catch? Each of those benefits carries with it a natural downside, and it’s really up to you whether the downsides will impact you or not.


Why Shouldn’t I Consolidate?


  • Loss of advanced repayment tactics. Consolidation may make it harder to pay back your loans strategically. For example, if you have multiple loans with different interest rates, it might be possible to make a series of overpayments directly to the highest-interest loans and pay them off quicker than the lower-interest ones, saving you money in the long run. If you consolidate, you only have one loan with one interest rate, so you can’t pursue that strategy.
  • Loss of Perkins loan benefits. Perkins loans are a special kind of federal loan with a few special benefits. They don’t gather interest when you use deferment, and people who work in certain public service areas can qualify for Perkins loan cancellation, which is one of the best forgiveness options out there. Consolidated Perkins loans lose both of these benefits.
  • Payment of more interest on the standard plan. Lower payments may be easier to manage, but it comes at a price. The longer it takes to pay off your loan, the more time there is for interest to build up, which means paying more total over the life of the loan (unless you voluntarily make larger payments than the minimum they’re asking for!).


Are you wondering whether you should consolidate your loans? What questions do you have? Sign up or log in with your Salt account to post them in the comments.