Understanding Student Debt

How can I better understand my own student loan situation?

What are some terms and definitions I need to know?

• Glossary, Consumer Financial Protection Bureau
• Glossary, Department of Education (StudentAid)

What is the difference between principal and interest?

Learn more about the difference between principal and interest and why that matters for student loans from the Consumer Financial Protection Bureau: https://www.consumerfinance.gov/paying-for-college/repay-student-debt/student-loan-debt-tips/#unique 

Where can I get good information about managing my student loans? How can I spot a student loan scam?

Knowing where to turn for reliable information about student loans can be difficult, especially with student loan scams at an all-time high.

Your primary and most-trusted source for federal student loan information should always be directly from the Department of Education through their Office of Federal Student Aid official website, StudentAid.gov

Through StudentAid.gov, you can:

1. Access the most recent, accurate announcements about upcoming changes to federal student loan management and policy
2. Read articles and guides about a variety of student loan related topics, including “Frequently Asked Question” articles for things like consolidation, income-driven repayment, and forgiveness and discharge options.
3. Login to view a breakdown of your federal student loan information, including your current servicer, total loan amounts, and payment plan information. StudentAid has also announced their intentions to make major improvements to the StudentAid website’s management capabilities, offering more tools to manage your loans and payments directly through the StudentAid webpage without having to go to your servicer website

Sometimes, StudentAid may not have information that you need, or may not have it in a format that works for you. A variety of other trusted organizations exist to provide additional verified and accurate information about student loans.

• The Consumer Financial Protection Bureau
• Equal Justice Works
• The Student Borrower Protection Center
• The Student Loan Borrower Assistance National Consumer Law Center

You can also always reach out to your federal student loan servicer for information about your specific loans and situation.

https://studentaid.gov/manage-loans/repayment/servicers 

Be diligent when seeking out information about student loans – trust but verify! Everyone’s situation is unique, and what is true for one borrower may not be true for another. Certain actions are not reversible after they are taken, so be sure you know and understand potential consequences (both positive and negative) before acting.

Student loan scams are also becoming more and more common in recent times. Here are some tips for avoiding student loan scams:

1. ONLY Federal Student Aid, your federal loan servicer, or your private lender will have information about your student loans – if you receive contact from any other sources, be wary.
2. Read the fine print! On communications promising to help you manage your debt, you are likely to find a small print paragraph stating that the sender is a commercial business. These are usually attempts to get federal student loan borrowers to refinance to private loans with fewer protections and flexibilities.
3. Beware “filing fees” or “consultation fees.” All documentation for federal student loans can be filed for free through official channels, and no one from your servicer or Federal Student Aid will charge a fee to speak to you or offer advice.
4. Beware “experts” that require deposits or payments to offer you advice – while some legitimate finance professionals ARE well-educated in student loan policy, others aren’t and may not have the background to offer you complete advice.

Read about more red flags for scams from Federal Student Aid: https://studentaid.gov/help-center/answers/article/how-to-identify-student-loan-scam