Saving During Student Loan Repayment

Written by Assistant Director, USFSCO - University of Illinois Saves | August 9, 2019

Over 44 million people hold $1.56 trillion in student loan debt. 11.4% of those borrowers are in delinquency or default

Forbes also outlined many more statistics about student loan debt in February 2019.

According to MeasureOne, private student loans make up an estimated 7.71% of the total outstanding student loan debt, so the vast majority of student loan debt is federal.

If you’re one of 17.8 million people in repayment or the 7.4 million currently in school, these can seem like very scary statistics. 

The important thing to remember is that there are a lot of ways to help federal loan borrowers avoid delinquency and default and even save some money. Here are a few:

    • Pay on time – Making payments on time will save you from a lot of credit report heartaches in the future, so know your servicer(s) and communicate with them ASAP if you run into problems.
    • Pay automatically – Signing up for ACH (direct deposit) payments with your loan servicer can get you a 0.25% deduction on your interest rate (in addition to ensuring your payments are being made on time).
    • Pay more than required – If you’re able, paying even $5 or $10 extra towards your principle can reduce your overall debt faster; you can use tools like to help you plan a debt snowball for student loans along with other types of debt.


  • Explore repayment plans – If you’re looking for ways to lessen the load of your monthly payment(s), you can use the Repayment Estimator to compare payment plans, including which ones would help you optimize Public Service Loan Forgiveness if you are qualified.


  • Know your options -  If you can’t make a payment, work with your loan servicer to enroll in a different repayment plan, deferment, or forebearance; if you choose deferment or forebearance, interest will likely continue to accrue on your student loans and be capitalized, so think about those as a last resort if you can to avoid an increase in your overall debt.
  • Remember your rights – You don’t have to pay for help on student loan issues. Even if you’ve defaulted on your loan, you have rights. Report bad student loan servicers to the CFPB. Report student loan debt relief scams to the FTC

Legislation related to student loans can change regularly. Luckily, federal student loan borrowers are typically grandfathered into the options that were available when they took out their loans. If changes occur that could impact your eligibility, make sure to review the fine print on things like Public Service Loan Forgiveness or alternative repayment plans.


Written by:

Andrea Pellegrini
Assistant Director, USFSCO Student Money Management Center
University of Illinois System

Tip of the Day

  • Written by Katie Bryan | April 10, 2014

    You can have an emergency fund! Here are 5 simple ways to start & maintain an emergency fund 

Saver Stories View all »

Making Saving Automatic Leads to Personal Success

Written by Lila Quintiliani | May 27, 2020

Ryan’s savings journey started when he was an active duty airman. Frequent deployments and temporary duty assignments gave him the opportunity to save. By the time he transitioned out of active duty, he had built up a healthy rainy-day fund and had started to aggressively save for retirement.


Setting a Goal Leads to Success

Written by Super User | May 24, 2019

Growing up, Marisa’s dad had always talked about saving first, but she said she didn’t really internalize it until much later. “I was drifting along with no plan, carrying a little bit of revolving debt, saving some money here and there, but without a real plan for it.”


How Smart Financial Decisions Can Create Opportunities 

Written by | November 22, 2019

Written by Stephen Ross, America Saves Program Coordinator | November 22, 2019

Of the many stories Military Saves shares, most describe how someone was in dire straits financially and worked their way out of it with the help of Military Saves. This time we want to highlight a different kind of story. This is a story about how responsible financial decisions can build on one another to create opportunities you thought only the super-rich enjoy.