Do we really have to say it? The best way to avoid student loan default is to pay the loan off. But how to plan for it? So how can you avoid a student loan default from the onset?


  • Understand Your Needs and Your Loan

Figure out exactly how much you are going to need. Include whatever you can’t cover yourself by whatever income you have coming in; then borrow no more than that amount. Do not accept a higher amount offered; it tends to get you in trouble. Then look at your loan documents carefully and make the best choice for you. This is a legal document that you have to live up to for some time. Understand the refinance options, the monthly payment, the rate, and when the repayment plan starts.

  • Borrow only what you need

Borrow only what you need to pay for your college expenses. Create a budget to determine how much you really need to borrow. Contact your school’s financial aid office to request a lower loan amount instead of borrowing the maximum amount you might be eligible to receive. Every college campus has a financial aid office with people who will help you come up with a budget and a plan. Follow it.


Federal Default Loan

Federal Default Loan

  • Track Your Loans

Banks and lenders make mistakes from time to time. If you find a discrepancy, get it fixed immediately. You cannot afford to let it fester. Find information about all of your federal student loans from the U.S. Department of Education using the National Student Loan Data System.


  • Keep Your Records

Keep a folder of all your correspondence, documents, loan papers, and track sheets in one place. You need to refer back to them from time to time; don’t be scrounging around trying to locate something important when you are panicking.


  • Communicate:

With your lender when you can’t make your monthly payments, graduate, withdraw from school, drop below half-time enrollment status at school, change your name, address, or Social Security number, transfer to another school or experience a change in your life that might impact your loan payments.


  • What if I can’t make my monthly payment?

If you are having trouble making your monthly payments, contact your loan servicer immediately. Your loan servicer can help you understand your options. You may be able to change your payment due date, switch repayment plans to get a lower monthly payment, get a deferment or forbearance, or consolidate your loans.

When it’s time to start paying off the loan, do whatever you have to; get a second job, or a third, make multiple payments, put everything you get against the loan.


A student loan default is the worst thing you can do to your credit record and your borrowing power going forward. Stay on top of it, communicate, research, and ask for help if you need it. You can get control, and it will be paid off, making you free of the debt. More help here: