Controlling Student Loan Debt

Don’t leave college with excessive education debt. These tips can help you keep your student loan debt affordable: plan carefully; cut loan costs; and take control of your budget now.

Plan Carefully

Careful planning is the first step in controlling your student-loan debt. Here are a few tips to get you started off right:

Borrow only what you need to cover the cost of education. The more you borrow, the more you have to repay – with interest.

Determine how much education debt you can afford to repay by analyzing future earnings. Try to keep monthly education loan payments to less than 8 to 10 percent of your gross monthly income. The U.S. Bureau of Labor Statistics has wage information.

Cut Loan Costs

There are several strategies you can use to help reduce the cost of borrowing for college. These are just a few:

Prepay your federal loans. You are permitted to prepay federal student loans without any financial penalty. If you can afford to increase your monthly payment, and direct your lender to apply the extra amount to the loan principal, you can reduce the total interest you pay on your loans.

Automate your payments.You may qualify for a 0.25 percent interest rate reduction on your Direct Loans if you permit your payments to be deducted automatically from your bank accounts.

Take Control of Your Budget

Learning to manage your money while you’re still in college is an important part of managing your student loan debt. Our Make the College Connection brochure includes a handy budgeting worksheet for helping you think about and calculate your finances.

Budget to control expenses. Include out-of-pocket education costs as well as expenses for living, transportation, personal items and entertainment. Analyze where the money goes and determine ways to cut costs. Consider buying used textbooks, using public or school-provided transportation, eating out less, and finding a roommate to share expenses. Always ask yourself before buying: "Is this something I really need?" If you don't know, then you usually can skip the purchase.

Talking about student loans feels a little like learning a foreign language. We’ve created a glossary to help keep things from getting lost in translation.



Identity theft can have very serious consequences for your finances and your future. Learn how to protect yourself from this serious crime at Identity Theft page of the FTC’s Consumer Protection site.



Taking these simple steps before your first payment is due can help you avoid payment problems later. More details in the USA Funds Student Loan Repayment brochure.



  • Your address.
  • Your phone number.
  • Your email address.