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Student Loan Tips

Before You Borrow Student Loans

Make cost a factor when choosing a college.

Compare tuition, room & board expenses, and annual fees for each school you consider. Check job placement statistics and average starting salaries for potential schools to see if graduates are having trouble repaying loans after graduation. Remember that college is a consumer decision. Like any large purchase, make sure the product you’re buying is worth what you pay for it. 

Know all your options.

There are several types of student loans out there. Federal student loans are the most common and come directly from the U.S. government. Private student loans are from private lenders, are often more expensive, normally require a credit check, and do not always offer the same flexible repayment plans available on federal loans. Complete and submit your FAFSA form as soon as possible to find out what federal aid you’re eligible to receive. Compare the terms and interest rates on each loan type before agreeing which to use and how much to borrow. 

Borrow wisely.

Never take out more in student loans than you absolutely need. Ask your college if they offer other options like work/study programs that can help reduce your debt after school. Ask your lender what your standard monthly payment would be before taking out the loans to see if it will be affordable. Or use the calculators on the U.S. Department of Education’s website to figure it out yourself. 

Plan ahead for repayment.

Make sure you know when your first payment will be due, what your interest rate will be, and how to contact your lender if you have questions. 

To learn more before you borrow: 

Current Student Loan Borrowers

Know what you owe.

Always keep tabs on your student loan balance, the kinds of loans you have, and who your lenders are. Use an online repayment calculator to check the cost associated with your interest rate. 

Stay current and pay on time.

Late or partial payments can do lasting damage your credit and lead to default. If your loans go into default—generally after about 270 days of delinquency—your options for repayment become much more limited. If you’re struggling to pay your student loans, don’t avoid the issue. Visit studentaid.gov and use their loan simulator tool to learn about different repayment plans and how they could help your situation and then go over your options with your lender. 

Keep in touch with your lender.

If you move or change your contact information, don’t forget to let your lender know. Missing an update about your loans could set you back. 

Know your options for paying off student loans.

Many loans come with a grace period, meaning that you don’t have to start making payments as soon as you finish school. You may be able to defer payments based on financial circumstances or qualify for loan forgiveness if you take a public service job. You can also consider consolidating multiple loans into one manageable payment. 

Never pay money upfront for help managing your student loan debt.

In North Carolina, it’s illegal for someone to charge you upfront fees for help dealing with your debt. Stay in touch with your lender for the best options on managing your student debt. 

If possible, get ahead on your balance.

Save on interest and even shorten the life of your loans by paying off the most expensive loans first and paying down your debt early. Even a small amount extra each month can make a difference. Include specific instructions with these extra payments, directing that they be applied to the principal of your highest interest loans. Then monitor your account to make sure extra payments are applied correctly. 

Monitor your credit

Keep an eye on your credit reports to spot errors or misreported debts. Catching mistakes early can help you protect your credit score. Equifax, Experian, and TransUnion now offer free credit reports every week.

Some of the Attorney General’s top priorities are protecting people’s hard-earned money and fighting for people who are investing in their education and their futures. This means cracking down on fraudulent student loan relief groups; investigating for-profit colleges that scam families, target veterans, and cheat consumers; and making sure that students are treated fairly in how they choose and pay for their higher education. Learn more below about how the Department of Justice is advocating for student loan borrowers below. 

Recent Student Loan Developments 

To make sure North Carolinians have important up to date information regarding student loans, please review the information below.  

  1. Make sure your contact information is up to date with the office of Federal Student Aid (FSA) and your loan servicer. 
  2. Learn about changes to Income-Driven Repayment (IDR) plans. More information from FSA about the IDR plans is available here. 
  3. Review your eligibility for Public Service Loan Forgiveness (PSLF).  
  4. Stay up to date on the Department of Education’s payment count adjustments toward IDR and PSLF programs.   
  5. See if you are eligible for a program to help you get out of default.   

And, as always, beware of scams and alert our office if you encounter one! There are many ongoing developments on the student loan front, and these changes may bring confusion and uncertainty. Scammers thrive in these conditions, so borrowers should be alert.

How to File a Complaint 

To file a consumer complaint regarding a student loan, including a predatory loan, scam, or unfair and deceptive trade practice, contact our office’s Consumer Protection Division: 

In addition to filing a complaint with NCDOJ’s Consumer Protection Division, you can also: 

Guidance for Student Loan Borrowers 

The Attorney General wants North Carolinians to have the information needed to make good decisions about student loans, including the resources below. 

Make sure your contact information is up to date with your loan servicer and at StudentAid.gov. 

Use the federal government’s loan simulator tool to calculate your student loan payments, ensure you are on the best repayment plan, and consider if loan consolidation is right for you. 

Be on the lookout for student loan scams, and contact our office if you believe you may have been a victim of a scam. 

If you have questions or concerns about your loans, contact your student loan servicer for free help. 

Work to Protect Student Loan Borrowers 

NCDOJ is committed to protecting North Carolina students and families, including the examples below. 

Student Loan Servicers 

We held national student loan servicer Navient accountable for its unfair and deceptive servicing and predatory lending, securing $37 million in student loan relief for more than 13,000 NC student loan borrowers. More information is available here. 

For-Profit Colleges 

The U.S. Department of Education announced it would discharge all remaining federal student loans for students who attended any college run by Corinthian Colleges. Students who attended a college run by Corinthian do not need to take any action to receive the benefit of this discharge. State attorneys general helped uncover widespread misconduct at the schools run by Corinthian, which closed in 2015, and the NC Attorney General has been fighting for loan relief for Corinthian’s students. 

Our office also advocated for students who attended national for-profit college chain ITT Educational Services, Inc. If you attended ITT, you have several options depending on when you attended and what types of loans you took out. More information is available here. 

Student Loan Debt Relief Scams 

NCDOJ stopped scammer Consumer Advocacy Center a/k/a Premier Student Loan Center from providing bogus student loan debt relief services, including making misrepresentations to borrowers, charging illegal advance fees for debt relief services, and providing false information to borrowers’ student loan servicers. We obtained $4,072,589 in refunds of illegal fees charged to 3,649 NC student loan borrowers. Read more here.