Student Loan Mistakes to Avoid

If you are struggling with student loan debt, you’re not alone. According to Mark Kantrowitz, student loan expert and vice president of research with, 69% of college graduates from the class of 2018 took out student loans, with an average debt of $29,800.

If you borrow more money than you need, or don’t understand how student loans work, you could end up with more student loan debt. It’s important to understand the total cost of your student loans and how to manage them.

4 common student loan mistakes

College students can make mistakes when it comes to student loans. Unfortunately, making the wrong choices when you’re in school can affect you for years after you graduate.

Here are four common student loan mistakes and how to avoid them.

1. Spending your student loan refund money on non-educational expenses

When you’re 18 and taking out loans for the first time, you likely aren’t thinking about how you’ll repay them in your 20’s or even your 30’s. It seems like a far way off. And, when you receive a student loan refund which could be a substantial amount of money you might think about spending those funds on a vacation or a great sale, instead of only on books, supplies and other education related expenses.

However, that’s a costly error. Spending your loan on extras means you’ll have to borrow more money to pay for school — and it’ll take you even longer to repay your debt.

Let’s say you took out $28,000 in student loans to pay for education expenses at 6% interest and a 10-year repayment term. Over the course of your repayment, you’d pay back $37,303; interest charges would cost you over $9,303.

2. Not knowing what loans you have — or how much you owe

When you’re in school, you’ll likely need several different student loans to pay for college, and they may be from multiple lenders. It’s easy to lose track of who you owe money to and just how much you owe. That problem can cause you to miss payments and fall behind on your loans, negatively impacting your credit.

If you’re not sure what loans you have or how much you owe, there’s two ways to track it down:

  • Visit the National Student Loan Data System (NSLDS): Enter your information on the NSLDS website and it will give you a list of any federal student loans you have, what your loan amount was for, and who is servicing them.
  • Check your credit report: Unfortunately, private student loans won’t show up on your NSLDS dashboard. To find out what private loans you have, check your credit report. You can do so for free at

3. Stopping payments on student loans

If you’re struggling with your payments, you may decide to just stop making payments on them. However, that decision can come with severe consequences, including hurting your credit.

If you can’t afford your payments, contact your lender right away to discuss your options. You may be able to temporarily postpone making payments or enter into an alternative payment plan, which could reduce your monthly payment.

4. Picking a longer repayment term

When you first take out student loans, picking the longest repayment term possible probably seems like a great idea. A longer loan term gives you a smaller monthly payment, which is more affordable on a tight budget.

But that longer loan term comes at a cost. The longer the loan repayment term, the more you’ll repay in interest. Over time, you could end up paying thousands more than if you opted for a shorter repayment term.

For example, let’s say you take out $25,000 in student loans at 7% interest and opted for a 10-year repayment term. You’d have a monthly payment of $290, and you’d repay a total of $34,833.

But let’s say you decided that monthly payment was too high, so you opted for a 15-year term. Your new monthly payment would be just $225, but you’d repay a total of $40,447 over 15 years. Reducing your monthly payment by $66 a month may sound great, but it would cause you to pay over $5,600 in additional interest charges.

Even if you do choose a longer repayment term for the payment flexibility, consider making additional payments on your student loan when you can. Although that may not be possible while you’re in school or shortly after graduation, as you continue your career and earn a higher income, don’t forget to put some of that extra cash towards your student loans. It’ll help you pay them down faster and save on the total cost of the loan.

Managing your student loans

If you’ve made mistakes with your student loans in the past, don’t beat yourself up, you’re not alone. There are options available to help you get back on track and manage your debt effectively.

If you’re considering refinancing your student loans, use College Ave’s refinancing prequalification tool to get a quote without affecting your credit score.


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