10 Biggest Student Loan Repayment Mistakes

Repaying your student loans quickly can help you pay less.

Many Americans are still paying off student loans after age 40, according to a recent survey by Credit Karma, a personal finance company that offers free credit scores. The average student debt balance among 2017 college graduates, according to U.S. News data, is nearly $30,000, and borrowers should know that making a repayment mistake can cost extra or increase the life of the loan. Here are some common student loan repayment blunders for recent college graduates to avoid.

Neglecting to make a repayment plan ASAP.

Borrowers should determine a strategy to repay their loans when they’re still in school before their grace period begins, experts say. “The grace period may seem like a honeymoon phase, but don’t let yourself get too comfortable. Instead, use this time to prepare your finances to take on several hundreds of dollars of repayments per month, likely over the next few years,” says Maizie Simpson, data and news editor at Credit Karma.

Not knowing how much you owe.

While borrowers may not want to think about their student loans for a while after graduation, experts say it is important to know how much is owed, the interest rate and when repayment starts. “Knowing how much you’ll need to pay each month on your student loans is a fundamental first step for smart financial planning, and the sooner you know it, the better” says Joe DePaulo, CEO and co-founder of College Ave Student Loans. “As students graduate and enter the workforce, everything from planning a monthly budget to negotiating their first salary can be better-informed if they know what that bill will be each month.”

Forgetting to update your contact information.

Borrowers should make sure their loan servicers have their current contact information, including mailing address, email address and telephone number. Repaying student loans is an obligation of the borrower, even if a bill from a servicer wasn’t received. Since a student loan servicer can change, experts say it is important to have up-to-date contact information on file.

Overusing forbearance.

Most student loans, even private ones, have payment forbearance options. While this option allows borrowers to suspend their payments temporarily when times get tough, interest still accrues. Experts say occasional use of forbearance, such as during job loss or when recovering from a natural disaster, is a good short-term solution to avoid late payments and improve cash flow, but using this option will grow instead of shrink a student loan balance over time.

Failing to research different repayment options.

A common mistake among borrowers is not being aware of all their options when it comes to repayment. “Federal student loans have different repayment options, and some may be better for your specific situation than others. Just picking the first option you see or the first that looks like the lowest payment may not be the best option for you,” says Anna Keisler, a certified financial planner for SG Financial Advisors in Sandy Springs, Georgia.

Not paying your debt down quickly.

For borrowers who want to pay off their student loan debt quickly, experts and seasoned student loan borrowers recommend an aggressive repayment strategy that entails paying more than minimum payments. “Instead of aggressively paying down high-interest line items on my student loan account or paying down line items with the smallest amount owed, I foolishly opted to continue paying an income-based calculated minimum and to spend money at bars,” says Ben Carter, co-creator of Manage Your Damn Money, a weekly personal finance podcast. Carter says he regrets not having a repayment strategy in his early 20s. “The result is my continuing to struggle with massive interest accruals,” he says.

Not considering adjusting a payment’s due date.

Many lenders, including student loan servicers, may allow you to change a payment due date. While some student loan companies may not offer this flexibility, many do. “Consider requesting a due date for your student loan payments sometime during the second half of the month,” Simpson says. “This will help you spread out your payments so that the first of the month doesn’t feel like such a money pit.”

Falling for student loan scams.

The U.S. Department of Education has received reports of student loan scams. “Borrowers have reported receiving phone calls, emails, letters, and/or texts offering them relief from their federal student loans or warning them that student loan forgiveness programs would end soon. Usually, the so-called student loan debt relief companies offering these types of services don’t offer any relief at all,” according to the agency’s website.

Not understanding how loan forgiveness works.

For borrowers interested in the federal government’s public service loan forgiveness program, commonly referred to as PSLF, experts recommend understanding all the rules and certifying employment every year to ensure eligibility. “The public student loan forgiveness requires an income-driven repayment plan, and some graduates are not aware of this when they pick a repayment plan, possibly resulting in years of nonqualified repayments,” says James Enriquez, a financial advisor at Strategic Insights Financial Planning Group in McAllen, Texas.

Not asking for help.

Paying student loans off can feel overwhelming. Often, common questions can be answered by contacting your loan servicer or reviewing information for borrowers on studentloans.gov. Borrowers can also take advantage of help from nonprofit student loan counselors, such as The Institute of Student Loan Advisors or the National Foundation for Credit Counseling, the organization that writes the U.S. News Student Loan Ranger blog.

More from U.S. News

The Truth About Student Loan Bankruptcy Discharge

Student Loan Forgiveness: The Complete Guide

5 Easy Ways to Reduce Student Loan Costs

10 Biggest Student Loan Repayment Mistakes originally appeared on usnews.com

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