Managing Student Loans

A student loan is the first experience with credit management for many students. To protect your credit rating, you must take proactive steps to borrow responsibly and successfully repay your student loan.


  • Always accept free money first. When paying for school, take advantage of all grants, scholarships and college savings available to you before taking out a student loan. If you must borrow to pay for school, exhaust all federal loan options before considering private (sometimes called alternative) loans, which can have higher interest rates and fewer flexible repayment options.
  • Borrow only what you’ll need. When accepting a student loan, know how much money you’ll actually need to cover your school expenses, which include your basic living expenses for the school term. Students are offered the maximum loan they are eligible for, but should only accept the amount they need.  Be cautious in pursuing additional loans outside of those offered by your financial aid office. Ask the financial aid counselor for more information if you’re considering taking a private student loan in addition to those that have been offered by the financial aid office. Since loans must be repaid, it’s best to borrow only what you need to pay for school.
  • Keep your future career in mind. When it comes to student loans, a good rule of thumb is to make sure your total amount borrowed is less than your expected starting salary, and some experts recommend that the monthly loan payment should be no more than 8 percent of expected monthly income after graduation. Information about average starting salaries in Oklahoma is available at, and you can estimate monthly loan payment amounts using the debt/salary calculator at


  • Monitor your needs. Last semester, did you find yourself with excess loan funds or were you struggling to get by? Monitor your needs and adjust your borrowing accordingly. Decide each time to borrow only what you need for school. Remember to always look for scholarships and grants before taking out a student loan, and exhaust your federal loan options before considering private or alternative loans.
  • Keep seeking free money. Grants and scholarships aren’t only for freshmen. Eligibility requirements for scholarship programs change, and new programs are added. Talk to your financial aid office or use a scholarship search engine like
  • Take interest in interest payments. If given the option to pay the interest accrued on unsubsidized loans during your college career, do so. These quarterly payments are


  • Think repayment. Start thinking about repayment before it begins. Make sure you adjust your budget to include your monthly student loan payment before your grace period ends. Consider your spending habits and priorities; are changes needed? For example, you may need to delay buying a new car to make room for your student loan payment. Be sure to select the best repayment method for you. Also, get real about how much you owe. Use the U.S. Department of Education’s interactive Financial Awareness Counseling tool to help you manage your debt.
  • Don’t nix the fixed. Recognize that your student loan payment is a fixed expense. Repaying your student loan is not optional, even if you withdraw from school before graduating. Remember, your monthly student loan payment is just as important as your rent, car payment or any other fixed monthly expense.
  • Pay your dime on time. Make your loan payments on time or your credit score will suffer. If you know your payment will be late, contact your loan servicer immediately to discuss your situation. Even if you apply for a deferment or forbearance, continue making payments on your student loan until you receive confirmation that your request has been processed and approved.
  • Talk it up. Communicate with your loan servicer regularly. Remember to notify your servicer of any changes in your name, address or ability to repay. There are a variety of ways your lender can help if you’re having trouble making your payment, but you have to stay in contact.
  • Revamp your repayment. Consider alternate repayment plans that are available to address borrower needs. For example, if you need more flexibility due to economic hardship, unemployment or other unforeseen circumstances, or you just can’t make your payment, there are several options to help you keep your account current. Bear in mind that flexible repayment programs, like deferment and forbearance, aren’t automatic; if you need help, you have to ask for it.
  • Don’t dump important documents. Keep copies of all loan correspondence. Create a “my student loan” file to hold statements, notices and other important loan documents