Common Student Loan Mistakes to Avoid

When it comes to student loans, a common refrain we hear from LearnVesters is, “I wish someone had told me …”

So, now we are telling you. The student loan system can be exasperating, confusing and just plain mystifying. Plus, even your own parents, all-knowing beings that they are, probably don’t know any more than you do. High school counselors aren’t infallible either.

Whether you’re planning to take out loans, you’re in school or you’ve graduated and your payments are about to kick in, we’ve gathered up the mistakes that can cost you money and cause you grief.

When You’re Taking Out Loans

1. Not Pursuing Grants, Scholarships and Financial Aid

What we mean: Make sure to first fill out your FAFSA form, even if you think you might not get any money, and go after as many grants and scholarships as you can before you turn to student loans.

Why: What if someone said, “Hey, you’re so smart, I’m giving you $50,000!” That’s what grants, scholarships and financial aid are, essentially. Yes, it can take a bit of work to find them, fill out the paperwork and apply. But man, what other job would pay $5,000-100,000 just for a couple hours or days of filling out paperwork and writing an essay? (Not the one you get after college when you have to pay your loans back, that’s for sure.) While financial aid isn’t free money, it can help you manage your education expenses.

Help to avoid it: The first step is to fill out a FAFSA form. You can get started looking for grants and scholarships by using a free service (or two) that helps you search for grants and scholarships, like FastWebScholarships.comFindTuition.com,ScholarshipExperts.com and Sallie Mae’s The College Answer.

Already made this mistake? You can still get scholarships and grants, even when you’ve already entered school, from small prizes for academic performance, to larger grants and scholarships found through the above search services geared to current students. If you secure one or more, consider using the money you save to pay off your student loan earlier, or see if you can have your scholarship or grant applied directly to your loan. And you can fill out a FAFSA every year you’re enrolled, so you can always apply for the next school year.

 

2. Discounting the Value of a Cheaper or Community College Education

What we mean: You might have the perfect college in mind, and it might be private and/or located in a different state. But don’t get so caught up in dreaming that you ignore the subsidized education in front of you!

Why: Many in-state schools have excellent reputations. (In fact, a number appear in U.S. News and World Report’s Best College Rankings.) And let’s put it this way: Say you expect to get paid $10,000 more a year (or $8,000 more after taxes) if you go to a brand-name school instead of your in-state option. But when you graduate, you may be paying $800 a month, or $9,600 a year to pay back your student loans. That’s a bad deal.

Help to avoid it: If you’re bent on graduating with a degree from your dream school, but it will mean going into serious debt, you should consider completing your first two years at an in-state school or community college, then transfer and finish up your degree at the school with the marine biology program. After all, even if you want a college with a specialized program, you would still probably spend the first two years getting general education credits out of the way. You could even spend those first two years saving up and working on your GPA so you’re better able to afford those last two years with savings and scholarships.

Already made this mistake? Check with your college to see if they will accept credits from summer classes you can take at your local community college or state university.

 

3. Taking Out Private Loans

What we mean: Don’t get your loan from a bank, non-profit organization or Sallie Mae when federal student loans are available. According to the Consumer Financial Protection Bureau, more than 54% of private student loan borrowers don’t exhaust their federal loan options, and many don’t even try to get federal loans at all.

Why: Private student loans usually offer fewer protections and options to students. The interest rates can be higher, or variable, which means they can go up. (Rates are really low right now, which means they probably will go up.) After you graduate, if you can’t find a job or you find only a low-paying one, private lenders can refuse to adjust your payments to accommodate your situation. With federal loans on the other hand, you can typically change your payment plan so it takes into account your financial situation, or defer your loans, so you can avoid default. (You don’t want to default.)

Help to avoid it: If you’ve maxed out your scholarships, grants and federal loans, and you still need more money to pay for college, it’s time to consider looking at a more affordable school or consider taking on a job while you’re in school to make up that gap.

Already made this mistake? Prioritize paying off your private loans ahead of federal loans, try to make interest payments while you’re still in school (work-study or a part-time job could be a great idea) and if you need to take out any more loans, turn to federal loans first!

And that brings us to …

 

4. Asking Your Parents to Co-Sign Your Loan

What we mean: If you decide to take out a private loan, you will probably have to get a co-signer on it. This is someone–probably your parent–who agrees to cover the loan if you cannot pay. Most federal loans don’t require a co-signer, but private lenders will usually want to see someone with a credit history sign the paperwork.

Why: If you and your parent think she could cover your payments if you can’t (and she is prepared to), then by all means, have her sign the paperwork. The problem comes when a parent co-signs your loans, you’re unable to pay when you graduate, and your parent can’t pay either. Then you’ve put your parent in a situation where she is probably being harassed by debt collectors, potentially ruining her credit as well as yours.

Help to avoid it: It’s best to avoid private loans altogether if possible, especially if your parent can’t afford to make payments of $500 to $1,500 a month when you graduate.

Already made this mistake? Prioritize making your payments on time and in full, so you don’t damage your co-signer’s credit.

 

5. Failing to Do the Math

What we mean: Before you take out a student loan, you should calculate what your payments will look like out of college, especially against the kind of salary you expect to make when you graduate.

Why: If you get out of school and realize then that your student loan payments are high, you could be forced to give up your ideal career to either get something more lucrative/soul-sucking, or have to move in with your parents and let job opportunities in the city of your choice pass you by while you pay off your loans.

Help to avoid it: A good rule of thumb to consider: Don’t take out more student loans than you expect to make your first year out of college.  For example: If want to work in marketing after college using your business major and get a starting salary of $40,000, don’t take out more than $40,000 in loans. If you’re studying to work in finance, $75,000 could be appropriate. And if you’re studying to be an artist or actor, well … try to get some robust scholarships.

You should also get wise about what your monthly student loan payments will be out of school. $800 or $1,000 per month? Not uncommon. Use this student loan calculator to find out what yours might be before you commit to a loan.

Already made this mistake? Do the math today! If you are chastened by what your student loan payments will be, you can consider either getting a part-time job to start paying them off now and avoid taking out more, or switch direction with your major.

 

6. Not Reading or Losing Your Documents

What we mean: You should receive at least one Master Promissory Note (MPN) for signing. It’s a binding legal document by which you agree to repay your loan or loans. You could have one that covers all your loans, or one for each separate loan.

Why: It includes a Borrower’s Rights and Responsibilities statement that explains the terms and conditions of the loans you received. In other words, all that important stuff you should know.

Help to avoid it: Make sure you read your MPN carefully, now and before you make any decisions regarding your loans, like putting them in deferment or deciding on a payment plan. Keep it in a safe place, because you’ll probably need to refer to it when you have to start paying back your loans. You might also consider copying it and uploading it to a cloud storage service like Evernote or Google Docs, so you can access it online.

Already made this mistake? Go here to retrieve a copy, then read it from top to bottom!

 

When You’re in School

1. Using Loans for Living Expenses

What we mean: You might have the option of taking out a student loan that is larger than your tuition so you can pay for living expenses.

Why: This can be an expensive option, because you are being charged interest for doing so. Your loans are big enough without having them cover pizza and spring break trips, too!

Help to avoid it: Look into participating in your college’s work-study program, or getting a part-time job to cover living expenses.

Already made this mistake? It’s not too late to bring in extra income. Consider picking up a part-time job or freelancing gigs to pay for your living expenses and also to start paying off the loans you took out already.

 

2. Waiting to Pay Your Unsubsidized Loans Until You Graduate

What we mean: An unsubsidized loan is one in which the government does not pay for your interest while you’re in school. That means if you don’t pay anything while you’re in school, your loan is growing even while you study.

Why: If you make your interest payments while you’re in school, you’ll probably save a bundle. For example, if you pay just $50 a month, you could save yourself more than $1,000 in interest expense on a typical $15,000 loan.

Help to avoid it: Again, try to pick up part-time work or work study to make your interest payments while you’re in school.

Already made this mistake? It’s not the end of the world, you’ll just have to pay a little more. But you can start paying interest now to save.

 

When Payments Are Due

1. Paying Just the Minimum if You Can Afford More

What we mean: It’s OK to pay the minimums if you are aggressively working toward financial goals like building an emergency fundpaying off credit card debt and getting on track for retirement, or if you have a really tight budget. But don’t pay the minimums just so you can have more disposable income for going out on the weekends.

Why: That can be an expensive choice. While many student loans–federal especially–have lower interest rates compared to credit card debt, they still have interest, which is accumulating while you pay the minimums. You’re also delaying the moment when you will finally be free of your student loan debt!

Help to avoid it: If you have more income to send to your student loan payments, you can either send in more money than the minimum, or even get in touch with your lender and restructure your payment plan so that the monthly payments are higher and the payoff period shorter.

Already made this mistake? Re-evaluate your budget and start paying more for your loans today. It also can help to calculate how long it will take you to pay off your loans if you just pay the minimum, versus if you increase your payments.

 

2. Choosing the Wrong Payment Plan

What we mean: If you don’t do anything before payments kick in, you’ll typically be automatically enrolled in thestandard payment plan: set payments of at least $50 a month for ten years or less. This is just fine if you can afford it–the standard payment plan means you’ll pay less in interest. But if you have federal loans, you have several options for your payment plan.

Why: If you’re struggling with payments, you can choose another option with lower monthly payments. Here’s the catch: If you choose another payment plan, especially the graduated payment plan (extended repayment will cost you more than graduated because it’s over a longer time period), you will pay much more in interest over the life of the loan. So think carefully about the payment plan that is best for you–whatever you decide could be a $10,000 choice.

Help to avoid it: Be realistic about your budget, decide how much you can afford, and get in touch with your lender about your options. Learn more about payment plans here.

Already made this mistake? Get in touch with your lender today about your options.

 

3. Putting Your Unsubsidized Loans Into Deferment or Forbearance When You Don’t Need To

What we mean: Deferment and forbearance can be life savers when you are struggling to find a job or can only find a low-paying job at the moment. They allow you to put your payments off until your financial situation changes. However, this option should only be taken if you absolutely need it.

Why: If you have unsubsidized loans, interest will accumulate during deferment and be capitalized–tacked on the principle of the loan. All loans–unsubsidized or not–will accumulate interest if they are in forbearance. That means higher payments when your payments start up again.

Help to avoid it: Consider a different payment plan or getting extra income before you delay your loans. If you do decide to put your loans into deferment or forbearance, try to at least pay the interest.

Already made this mistake? Contact your lender and see about taking your loans out of deferment or forbearance, if you can afford it. At the very least, start making interest payments so the balance of your loan doesn’t grow.

 

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning LearnVest Planning Services and any third parties listed in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.

Story originally by LearnVest.

  • I’ve been swearing by this method for years! It really works! However, I add some cinnamon and nutmeg to mine because it reduces redness 🙂

    • SCFio

      Same here! I sometimes put cinnamon and nutmeg in my cleanser.

    • Amir Akhtar

      I’ve try it last night and yes it work..work soooo smooth..i don’t need to spend money for some useful product anymore..tq so much for your info..

    • Toshiro 4life

      i had a question. can we use any honey instead of raw one?

      • TARHEEL Kidd

        Raw honey is more affective

  • Yum for my face! So simple and easy!

  • kendall

    i can’t wait to try this!!

  • Patty G

    How do you keep from eating it?! Haha

    • shandi

      Right! I keep touchn my face and licking my fingers lol

      • Arlene Erfe

        hahaha.. doing the same thing,..!!

    • Stephanie

      Too funny! I tried it last night and I kept licking my lips trying to get a little taste.

    • Sonal Srivastav

      I like honey and i keep licking my finger continuously

    • It’s hard not too!

  • SCFio

    I swear by honey masks AND apple cider vinegar. If you haven’t used this as a toner, I would definitely recommend it. I struggled with acne for years, and once I started using that at night before bed, my skin is CLEAR!!

    If you use raw ACV, make sure dilute it with a little water.

    • Guest

      Do you use the ACV toner right before applying the lemon/honey mask?

    • lisa

      i think,? ACV and lemon juice together may be redundant since they are both very acidic. I would suggest trying each w/honey & seeing which your skin prerfers. Dilute ACV in distilled water before adding to honey (mabe 1/2 tsp ACV to 2 tbl distilled water mixed well) add diluted ACV to honey instead of lemon & follow directions above. If you like the outcome use 2xs a week for a month. Then switch & use lemon instead of ACV with above directions 2xs week for a month & decide which acih works best. I also think ACV can be used diluted in distilled water as a quick rinse or toner if you don’t have time for the mask. For myself i like to squeeze honey right on lemon half & use to scrub my face in circular motions & then i rinse with cool water. I have very sensitive skin so I don’t leave sit like a mask, but i can use it this way daily. Everyone’s ideas here are great! Lisa

    • Yeah, this is definitely a great idea!

  • Emily D

    Just tried this and LOVED it! Perfect pick-me-up for a Thursday evening.

  • Guest

    Confused… is Stephanie a beauty expert, or is this based on the fact that she’s just a blogger?

  • Frugalous Life

    I’m going to be adding this to my weekly routine! I just did a post about DIY anti-wrinkle coffee & coconut oil lotion!

    http://thefrugalouslife.com/2013/09/18/diy-anti-aging-cream-with-caffeine/

  • Celena1d

    Works great!!! Adding cinnamon really helps the redness on your face too!

  • Can’t wait to try this. I love how simple the ingredients are!

  • Sandra Magni

    If I want to use this everyday, instead of making a new mask everyday, can u save a big amount of this in an old body lotion can?

    • Formerly_Marcella

      No, the lemon juice will start to oxidize as soon as it’s exposed to air and will be less effective.

  • Starleisha Gingrich⭐

    My eyelids are sticky but i think i can feel this working!!!!

    • I avoid the eye area..

    • nonam

      you surely applied a generous amount to your face (:

  • Guest

    it made my skin red, puffy, and covered with hives! 🙁 I’m not allergic to any ingredients in the mask, why did my face do this?

    • Andra Sabin

      I’ve researched this quite a bit recently and it seems that you can be topically allergic to this. My advice, always do a spot test before putting anything new on your face.

  • Asim Mohiddin

    Thank you for the wonderful post. Definitely gonna try this. Thanks for the share, looking forward for more post regarding this in future. Worth reading.

    large pores

  • jelly

    hey guys, what to do first? dilute an AVC with water and make this as a toner before applying the honey mask on the face?

    • Prismonic

      Toner follows a mask removal.

  • Mira

    Why is it only for 20/30 year olds?

  • inubiyamarsha

    Go easy on the lemon though can be an irritant for sensitive skin, also baking soda can replace the lemon juice.

  • Natalie

    Please everyone, don’t use lemon on your face. its not good for you. Here’s a forum to back up these facts, and also have great skin care techniques to help you with almost any skin issue!

    http://www.reddit.com/r/SkincareAddiction/

  • abs

    is this everyday?

  • Guest1

    shall I try this everyday?? or how often ??

  • Yoli

    is this for everyday use?

  • Anna Belle

    How many times per week? Can we do this everyday?

    • jackieprem

      I m in late 40’s I can apply raw honey n lemon on my sensitive skin? I m using the 2 items wf tomato as a moisturers. My face burn marks a lot because I used to work under sun I my early 30’s. It safe to continue? Is OK my skin look OK expect still f scars n dark spots.

  • Angela

    Great Info! Thanks!!

  • This was super helpful! Thanks for sharing!

  • Christie Shields

    I made on-time payments to three different lenders for three years. Everyone kept telling me to consolidate. I heard about the Public Service Loan Forgiveness program, which basically forgives your student loans after you make 10 years of income-based repayments while employed as a public servant, such as a teacher. I decided that before I applied for the program, I would consolidate my student loans and listen to “everyone.” I was thrilled that my three years of on-time payments would count toward my 10 years of payments– absolutely thrilled! I thought, “I’m almost a third of the way there!” When they looked for the student loans I had paid on for three years and records of all those on-time payments, they didn’t exist. This was because I only had one loan now: the one I just consolidated. I was devastated. Make sure you do your homework. Student loans are not one size fits all. I listened to others’ advice and assumed it would work for me. As the article states, there are so many options and you have to do your homework (no matter how agonizing that might be) to find out what will be best for you. I wanted to share information about the program, but also share my story to make sure that others don’t make the same mistake!

    • I’m so glad you posted your story! I am working on my Master’s and planning to go into the non-profit sector, but I’ve had a hard time finding the fine print about the Public Service Loan Forgiveness program. Now I know something else to look for when it’s time to start repaying.

      PS Do you have a good resource for information on the PSLF program? Most of what I have found is overview material.

      • Christie Shields

        I’m glad you found it informative! Student loans are so tricky! I looked over this website https://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service . After reading through that and going through the application, I wrote down my questions and concerns and called the number to speak with someone. Here’s the number: 1-800-4-FED-AID (1-800-433-3243)

  • This is a great article, way more thorough than other’s covering student loans and how to stay out of debt. If only we could just make higher education less expensive : )

    http://www.thepolitesse.com

  • Ranjitha

    When can we apply this mask, either in the morning or in the night time? and will it be ok for sensitive skin?

  • Lala

    Should I be using mask concoction everyday to achieve the smooth acne free skin?

  • O Dyy Odion

    I need any kind of loan contact us on a simple way to get your loan transfer easy Email: [email protected]

    Regard
    Mr James Thomas

  • Lauren

    One extra thing to consider with regard to parents being co-signers on your debt is a life insurance policy. Although it’s not fun to think about, in the event of your death, your co-signing-parent would continue to be liable for your loans. A life insurance policy is a great way to protect your parents from sudden unexpected costs if anything should happen to you.

  • esther

    Its bette to massage the honey straight into your face til it starts to get warm. Then squeeze a little bit of the lemon juice right into your hands and massage it on top of the honey all over ur face. The lemon will emulsion the honey directly on skin giving it more of a cleansing action. Rinse with cool water.

  • Samantha

    i tried this two days ago for my first time. it said it works and you will start seeing results before your eyes … i did!!!!! after i cleansed my face i cut half of a lemon and put honey on the lemon and rubbed it on my face i have little scarring because im a picker and that scar is going away! i struggled from acne for years!!!! i tried everything and nothing. i wash twice a day and use the lemon and unfiltered honey before bed!!! thank you!!!!!!!! skin is also smooth and redness is going away and i havent had a boil 🙂 i also struggle from those. every time one comes i pick pick pick and then it goes away but have the scar from it then another one im not even kidding comes back the next day or two. so this helps!! crossing my fingers no more boils!!!! (:

  • brigtte

    is it a must using raw honey ?

  • Valerie

    I’m very interested in this kind of beauty style

  • Muthia Afifa

    Im 19 th years old , i want to start to take care of my beauty ,it said that this beauty mask are for 20s -30s ,is it ok if 19th years old girl use this mask? Is it good for my age?

    • Jessica

      I wont be 19 for a few months, I have been doing this for about a year, works wonders! I also use some lotion soap when I am done with it!

  • Alaa A.

    Can I wash my face with my regular facial cleanser after rinsing the mask?

  • karen

    I put cinnamon and strawberry’s in mine it made my skin soft like a baby’s bum

  • jaspreet saini

    Can i apply this lemon+honey mask daily?
    in how many days i can see the difference ….m getting so many pimples these days on my face

  • Jan

    I’ve tried this recipe before when i had breakouts and it actually did work. It helps reduce my acne scars as well as treating my acne. But if you have sensitive skin I think you shouldn’t add too much lemon, they can irritate your skin.
    https://tastybeautyy.wordpress.com/

  • Diana Marc

    it is very good your article. i found also in this link something interesting about honey http://madeby-u.com/2015/11/14/the-sweet-care-honey/

  • Smith Helen

    You can find more informațional about home Here http://madeby-u.com/2015/11/14/the-sweet-care-honey/

  • Ash Vini

    can I do a lot and store it in container? Must it be kept in the fridge or can I keep it in the room ?

  • Mayuri Patel

    can i use this facemask everyday?

  • I’ve been doing this for a few evenings and my skin looks times better!
    I’m going to keep it going.. A new nightly ritual! 🙂

  • I’m obsessed with this mask – it’s my favorite nighttime ritual!

    http://www.olenaloves.com

  • I use it about 4-5 times a week, but I know people who use honey masks every day, and they’ve cured all kinds of skin problems.

  • NYC Bae

    Do we wash our face before/after doing this or is this like a substitute for face wash?

  • roshni

    I don’t know why and how it just made my skin 2 shades darker :-(.. Probably because of the proportions. 🙁

  • akira delicano

    how many minutes should i steam my face?

  • Patricia Smitth

    Lemon has a lot of uses including drying up acnes and pimple, but it can also dry the skin. I usually use Solvaderm for this. Always moisturize after doing this ok?

  • Toshiro 4life

    what about the daily? can we use it everyday? how many times a day/week? can we use it before went to bed?

  • Mik

    How often should you apply its per week , every day or not ….?

  • Lemon contains citric acid, which helps you lighten your old acne scars.
    More use of lemon: https://thewellnesscorner.com/article/others/9-awesome-uses-of-lemon