7 Tips for Managing Student Debt

money in piggy bank

Pursuing a college degree is an investment in your future, but unless your education is funded entirely by scholarships, student debt can be a very stressful concern. Whether you’re thinking about heading back to school or you’re a recent graduate, here are some ideas to manage student debt:


The first step in controlling debt is understanding debt. Information about all of your federal loans is accessible on the National Student Loan Data System. The database does not, however, include any private loans you may take out with banks or other institutions, so be sure to keep track of those as well. Other helpful resources to know are the Federal Student Aid and Federal Student Loans websites, both of which include repayment calculators and other helpful information. Ashford University also offers students free access to Loanlook, a web-based suite of tools that help to manage all student loans. Loanlook tools can be accessed through Ashford’s Student Portal, providing easy access to loan information, budgeting software, and financial literacy training.

Don’t Take Out Loans You Don’t Need

This item may seem obvious, but there is a temptation for students to borrow unnecessarily. Why? Federal student loans usually carry a lower interest rate than other private loans. But those loans will have to be paid back eventually and even a low interest rate can compound quickly if you’re not careful. Take a hard look at your financial situation and only borrow what you really need. Just because you can get a loan doesn’t mean you should.

Monitor Other Sources of Debt

Most conversations about student debt focus on student loans, but many students also rack up significant credit card bills on top of that. According to Debt.org, the average undergraduate student carries $3,200 in credit card debt and the average graduate student carries $7,800. These amounts can be especially dangerous over the long term, as credit cards tend to charge high interest rates. Resist the urge to charge purchases because you assume you’ll be making more money once you’ve earned your degree.


There is a pecking order when it comes to student loans. If possible, pay off the loans with the highest interest rates first. Private loans will usually take priority over federal loans since they carry a higher interest rate and feature fewer repayment options.

Explore Your Options

If you’ve started repaying your student loans and you’re finding it difficult to keep up, understand that there may be some alternatives available to you. Federal loans will likely be eligible for an Income-Based Repayment plan or a Pay As You Earn plan. The advantage of these options is that they calculate your payment as a percentage of your income. The downside is that they will extend the term of your loan.

To Forgive Is Divine

You might even be able to wipe out some of your loan. Yes, really! If you work for the government or certain non-profit organizations, you may qualify for the federal Public Service Loan Forgiveness program. You will have to meet special terms and conditions to qualify – 10 years of qualifying loan payments while working full-time -- so it’s important to read the fine print. Even if you don’t qualify for federal loan forgiveness, you may still have options. Many large charities, such as the Peace Corps and the Corporation for National & Community Service (AmeriCorps), offer loan forgiveness in exchange for volunteer service.

And if You Run into Trouble…

Unexpected emergencies can lead to financial problems, and you may find yourself in the difficult position of not having the money to pay your loans. In a situation like that, the worst thing you can do is just ignore your loan. Defaulting on a student loan will destroy your credit score, could lead to wage garnishment, and may result in the lender demanding payment of the full balance of the loan. Before you default, contact the lender and discuss deferment. Usually, lenders will be willing to work with you to find a reasonable solution.

The key to managing student debt is to always think long term. Don’t make hasty decisions today that you might regret further down the road.


Written by by Erik Siwak, Communications Manager for Bridgepoint Education.

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