Confused About Your Student Loans? You're Not Alone

Enlarge this image Chris Nickels for NPR Chris Nickels for NPR

Americans have about $1.3 trillion in student loan debt. And there's yet another survey out that shows students in this country are confused about their loans, in the dark when it comes to knowing what they've borrowed, uncertain about how to pay them back.

I've written before about how I was one of those people. My federal student loans were a constant source of stress, and after doing the math I figured I was paying more than 30 percent of my income every month in loan payments. And because of high interest rates, I was deeper in debt than when I graduated.

And then came my epiphany, courtesy of President Obama and his 2014 State of the Union address: "We're offering millions the opportunity to cap their monthly student loan payments to 10 percent of their income," the President said.

That opened my eyes to the opportunities out there, and to the importance of keeping informed about your rights and options.

Loan servicers, the companies that manage student loans for the Department of Education, don't have a mandate or incentive to tell borrowers about these programs. And borrowers don't get to choose their servicers, either.

And so, with that in mind, here are three of the best sources for information that can help if you're having trouble paying your loans, or you're just confused about how the process works.

Tips For Recent Grads

Did you know that different loans have different grace periods, or that there are opportunities — in some cases — for loan forgiveness? No? Well, the Institute for College Access & Success has a tip sheet for recent grads to explain these and other key points that can help you make good decisions.

A Tool For Knowing Your Options

The federal Consumer Financial Protection Bureau has built a question-by-question tool for getting you more familiar with your loans and understanding how you can pay them off. That's no matter if your loans are federal — through the government — or private through a bank.

Calculating Repayment Options

Studentloans.gov has a helpful payment estimator to figure out which of the (many) repayment plans might be best for you. Enter your annual income, your remaining loan balance, your interest rate, and let the machine do its magic. These are just estimates, but can be very helpful.

As we've pointed out before on NPR Ed, there are five income-driven repayment plans from the Department of Education — most of which come with a chance for loan forgiveness. Recent findings show that, often, when borrowers do manage to find out about these plans, figuring out how to get into and stay in the programs can be another headache.

That conclusion is from the CFPB, which asked for comments from the public last year. It was the first time borrowers had a place to report their experiences with their loans and their servicers. And they had a lot to say: The bureau got more than 30,000 comments.

Borrowers reported "a wide range of sloppy, patchwork practices that can create obstacles for repayment," the bureau said. Many people reported that their records were lost, or customer service didn't have the latest information. That's just the beginning. The bureau suspects that problems with servicers have left borrowers vulnerable to scams.

Reading through the comments, it seems all too familiar. I'm one of the 10 million borrowers who have seen their servicer change in the past five years.

Mine changed without notice when I tried to enroll in the Public Service Loan Forgiveness program. Then my records were lost and my payments more than doubled. Every time I spoke to someone in customer service, they had a different idea of how to fix the situation.

But I've been diligent. I've lowered my payments and I'm on the road to loan forgiveness. While I once wondered if taking on so much debt to work at a nonprofit news network was worth it, I now think it was.