Get savvy about student-loan repayment

The Savage Truth

Americans owe more than $1.34 trillion on student loans — more than credit card debt or car loan debt. Yet it seems that many student loan borrowers are woefully uneducated about how to repay that debt. In fact, far too many fall victim to student loan debt repayment scams.

Illinois Attorney General Lisa Madigan has been at the forefront of a movement to shut down these scams. Her office filed suit against some of the major offenders nearly two years ago. Her website explains these scams ( 

The Consumer Financial Protection Bureau has also taken up the cause, going so far as to sue Navient, the largest student loan servicing company, for “systematically and illegally failing borrowers at every stage of repayment ... through shortcuts and deception.”

For the millions of student loan holders, many of whom must set up repayment plans in the coming months, there are still huge challenges in the process. And clearly they can’t count on their loan servicing companies to provide guidance to the best solutions.

So here are a few steps to take to head off potential problems.

Make a list of all your loans: That’s how you start to create a sensible repayment plan. To find your federal student loans, go to That’s the Federal student loan database. Or call them at 800-433-3243.

For your private student loans, you must talk with your loan servicer to make repayment provisions. They have likely contacted you already. If not, check your loan documents. Also, remember to include in your debt list any loans your parents may have taken out to provide for your education.

Know the difference between federal student loans and private loans: Federal student loans offer certain helpful repayment programs to minimize costs as you are starting out, including ways to suspend (forbearance) and defer repayment if you don’t have an income, or to lower payments temporarily based on your lower starting income. For more information, go to There you also can find information about a federal program that could eliminate your debt balance after 10 years of on-time repayments, if you have a qualifying job.

At the very least, you can lower your interest rate by 0.25 percent by signing up for automatic monthly payments from your checking account.

If you have a private student loan, you won’t get much help. These loans typically carry higher rates, and the lenders have no incentive to assist you by reducing it. The only way out of these private loans is by refinancing through a company like

Figure out the best repayment plan: You’re a college grad, so you can do this! Go to the government website and click on the far right tab, “How to Repay Your Loans.” There you will find all the necessary information to understand your options. There is even an “estimator tool” that lets you sign in securely, pull information on all your federal student loans from their database and calculate monthly payments under each repayment strategy for which you qualify.

Do not pay anyone a fee for help with student loan repayments: Upfront fees are typically a sign of a scam. You can get all this information for free on federal loans. And private student loan services are obligated to give you information about the best terms they offer.

Get trusted help if you think your servicer is not being honest: The National Consumer Law Center has a helpful program at You can file a complaint with the Consumer Financial Protection Bureau at Let your servicer know you understand these options, and demand correct answers.

It was worth taking out the student loans to pay for your education. Now you can prove the value of that education by making the best deal on your loans. That’s The Savage Truth.

Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” She responds to questions on her blog at

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad