Preventing Default – Top 10 Ways to Avoid Default
The best way to avoid default is to stay in contact with your lender or servicer, especially when you cannot make your payments. Your lender or service will assist you with any problems you may experience during the repayment of your student loan(s). Stay on top of the situation by following these ten guidelines:
- Understand your rights and responsibilities regarding your repayment obligation, as well as your repayment options.
- Borrow for college expenses only. Borrow only the amount you need and only what you can reasonably expect to repay.
- Keep all records regarding your loan. Make copies of all letters, canceled checks, and any forms you sign.
- Notify your lender or servicer when you have a change of address, phone number, or name, or if you change schools or your enrollment status.
- Seek help as early as possible if you have any difficulty maintaining your student loan repayment arrangement.
- If you have any questions, talk to your lender or student loan guarantor about the particular terms of your loan.
- Keep credit card debt to a minimum or avoid credit card debt completely.
- Create and maintain a budget that is within your monthly income.
- Consider making nominal student loan payments while in school. This will reduce the amount you owe after graduation.
- Make loan payments on time.
Source: Federal Student Aid
Last updated: 11/10/2020