Some student loan repayment mistakes are made the day you borrow money.
|
Reviewed by Mark Evitt
|
Edited by Tracy Stewart
|
April 17, 2026SaveAdd us onShareMore
Getty Images
Steer clear of these common student loan mistakes, both before and after you graduate.
Key Takeaways
- Student loan borrowers can make mistakes when applying for funds that could make repayment more difficult later.
- Borrowing the wrong amount, misunderstanding terms and not considering private loans are common mistakes.
- Changes to federal law will impact which repayment plans are available to borrowers after July 1, 2026.
- Each borrower needs to consider their unique circumstances when determining how best to repay student loans.
The headlines are dire: 42.7 million borrowers owed a combined $1.6 trillion in student loan debt, according to 2025 data from the U.S. Department of Education. About a quarter of those loans were set to become delinquent as the federal government resumed its collections activities.
Many of these loans are old, issued decades ago, says Ken Ruggiero, CEO of private student loan lender Ascent. He doesn’t think newer borrowers should let the numbers scare them out of pursuing a degree. “We’re ignoring some of the good benefits of financing an education,” he says.
However, borrowers certainly want to avoid repayment mistakes and that starts with being smart about which loans they take out in the first place. Here are student loan repayment mistakes to avoid both before and after you go to college.
Failing to Plan for Total Borrowing
Too many people borrow for college without considering the total cost of their education. If you look at your expected student loans for one year and think they seem reasonable, multiply that number by four and see if you feel the same way.
If you’re a parent, it’s especially important to consider if and how much you will be contributing to the education of each child. “A lot of times, people conveniently forget about kid No. 2 or kid No. 3,” says Ruggiero.
Knowing how much debt you will accumulate in total is the first step toward ensuring you can pay it off some day.
Borrowing too Much
“Students overborrow at times,” according to Melanie Gillespie, dean of enrollment operations at Tri-County Technical College in Pendleton, South Carolina. That can make it difficult to repay loans later and could impact a person’s overall finances. “That gets them in a spiral,” Gillespie says.
Rather than accepting all the loans offered, students and their parents should be sure future payments will fit within their expected post-college budget. If not, they may need to select a cheaper school, delay college or work while attending classes.
Borrowing too Little
It sounds counterintuitive, but borrowing too little could actually make repayment more difficult in the future. Students who want to limit their student loan debt may choose to attend school part-time, a move that significantly increases their risk of dropping out.
“We see it all over the place, especially with adult learners,” Ruggeiro says.
Students enroll part-time, borrow student loans and then drop out. As a result, they leave college with no degree but with debt that can be difficult to pay off, given their employment prospects.
Read: Best Student Loan Refinance Lenders.
Dismissing Private Loans
Federal loan programs are most popular with students and their families, but they aren’t the only option available.
“The schools are very good at packaging (federal) PLUS loans,” Ruggiero says. However, better terms might be available on the private market. “If a parent has a credit score over 780, then in today’s interest rate environment, they can get a cheaper loan from Ascent.”
Private loans can come with many of the same features as government loans, such as forbearance and economic hardship provisions. They may also have more flexibility in terms of repayment periods.
“People need to know the terms,” says Steve Azoury, owner of Azoury Financial in Troy, Michigan. “Shop it like it’s any other kind of loan.”
Just remember that if you are interested in a loan forgiveness program, federal loans are the only option.
Read: Best Private Student Loans.
Not Communicating With Lenders
Communication is essential once you have completed your education and are in the process of repaying your loans. If you are going to be late on a payment, don’t keep the loan servicer in the dark.
“Each time you don’t call, it gets progressively worse,” Ruggiero says.
Servicers may be less likely to send your account to collections if you stay in communication about late or missed payments. Calling also provides lenders with the opportunity to offer a forbearance or other debt relief.
Making Consolidation Mistakes
Federal loans have long offered several fixed and income-driven repayment plans. Those options will change significantly on July 1, 2026, and borrowers need to understand the ramifications of consolidating loans before then.
“I could caution that this is the time to be careful about consolidation,” says Glenn Sanger-Hodgson, a financial planner with Shonan Gold Financial in Tallahassee, Florida.
He notes there is an “urgency” for those with Parent PLUS loans to consolidate before the July 1 deadline. That’s the only way these borrowers will continue to have access to an income-driven repayment plan. Meanwhile, those with other loans may lose access to some repayment plans if they consolidate before July 1.
Loan consolidation is an easy process. It can be requested within your federal student aid account, but can take up to 90 days before it is complete. This is why time is of the essence for Parent PLUS borrowers.
Missing Out on Loan Forgiveness
Loan forgiveness programs are a prime reason to choose federal student loans over private loans. Public Service Loan Forgiveness is one of the most popular options, wiping out any remaining balance after 10 years of payments. To qualify, people need to work full-time for the government or a not-for-profit organization.
“You really have to stay on top of the paperwork,” Gillespie says. Borrowers need to be enrolled in the right repayment plan, and there is a PSLF form that should be submitted annually. Waiting to submit documentation until the end of your 10 years of service could backfire.
For instance, not all not-for-profit organizations qualify for PSLF, Sanger-Hodgson says. Unions, for instance, are excluded. “The best practice is to submit an employment certification (each year),” according to Sanger-Hodgson. That will alert you to any potential issues early on.
Read: Best Student Loans for Graduate School
Ignoring the Option to File Taxes Separately
Married borrowers with an income-driven repayment plan may be missing out on an opportunity to lower their monthly payments, Sanger-Hodgson says.
If you are a married couple filing jointly, payments will be set based on your household income. Filing taxes separately means only the borrower’s income is considered when monthly payments are calculated.
This strategy can result in significantly lower monthly payments, but there is a caveat. Filing separate returns as a married couple can limit your ability to claim other tax breaks, so carefully weigh the potential costs and benefits.
Automatically Selecting the Smallest Payment
On the other hand, making the smallest payments possible could mean you are in debt for decades and that could be an expensive mistake.
“One person said her goal was to pay off her student loans before she retired,” Azoury says.
A long repayment period means small monthly payments, but you’ll be paying a large amount of interest. Azoury says it’s a mistake to ignore the overall cost of the loan and focus on payment size alone.
Listening to the Wrong Advice
The internet is full of advice for student loan borrowers, and your family and friends may have tips that worked for them. However, take everything with a grain of salt.
“Borrowers need to be careful about the advice they hear generally and in the news,” Sanger-Hodgson says. “What applies to one group may not apply to another.”
Don’t blindly follow the advice you receive. Instead, carefully consider your personal circumstances and, if necessary, consult with a trusted finance professional.
Tags: student loans, student debt
