Managing Your Student Loans

When you borrow money with a subsidized loan, you can avoid paying interest on your loan balance—at least temporarily. That feature makes it less expensive to borrow, and it can reduce the total cost of whatever you’re borrowing for.

MOHELA, the Missouri Higher Education Loan Authority, is a nonprofit student loan servicer that works with the U.S. Department of Education to manage billing and payments for federal student loans. The Missouri-based company is a legitimate student loan servicer that is contracted to handle nearly 25% of the Department of Education's accounts.

An unsubsidized loan is a type of federal student loan that requires the recipient to pay interest on the loan as soon as it is funded. The student receives no grace period in which they can accept funds without paying interest.

Navient is a corporation based in Delaware that provides educational loan management and business processing services at the federal, state, and local levels for clients in the education, health care, and government sectors. But it is perhaps best known as one of 10 student loan servicers that the U.S. Department of Education works with to manage federal student loans.

A student loan deferment is an arrangement allowing you to postpone or reduce loan payments temporarily without damaging your credit scores. Any student loan payments you skip during deferment must be made up later, which means a longer repayment period than originally planned.

In-school deferment is a temporary postponement of repayment of federal student loans that students can obtain while enrolled in school, and in some cases, for six additional months after they cease to be enrolled. It allows you to ease your financial burden while you're in school and focus on your education.

Great Lakes Student Loans is a student loan servicer that contracts with the U.S. Department of Education. As a servicer, the company is responsible for helping borrowers manage billing and payments for federal student loans. Great Lakes Student Loans handles nearly 18% of all federal student loan accounts.

Nelnet is primarily a student loan servicer. In this capacity, Nelnet student loan servicing works directly with borrowers to manage and repay their loans. While these loans are owned by the federal government, Nelnet contracts with the U.S. Department of Education to handle federal student loans in repayment.

Debt consolidation is using one loan or credit card to pay off multiple loans or credit cards so you can simplify your debt repayment. With one balance instead of many, it should be easier to pay off your debt and, in some cases, secure a lower interest rate from the lender. Student loan consolidation is available for private and federal loans.

Income-driven repayment plans cap student loan payments at a percentage of your discretionary income—the amount remaining after you deduct taxes, other mandatory charges, and expenditure on necessary items. An income-driven repayment plan allows you to make payments based on your earnings for 20 to 25 years, depending on your plan. At the end of your required payment period, as long as you’ve fulfilled all of the requirements of your program, any remaining balance will be forgiven.

Student loan garnishment happens when your employer pays money you owe to a student loan lender. When you default on a loan, lenders can gain the right to demand a portion of your pay, and your employer is generally required to cooperate. Both private lenders and the federal government can and will garnish wages on defaulted loans.