IIf you took out federal student loans to pay for your education, you may have multiple loans spanning different years. You might have even more loans to research if you have also borrowed private student loans.
Unless you have consolidated or refinanced your loans, you may not be able to keep up with them all. Here’s why it’s important to know your loan balance and how to find it.
Why it’s important to know how much you owe
It is important to keep track of your student loan balance, especially if you are responsible for many loans. If you lose track of just one due date, you could fall behind on loan payments. Payment history represents 35% of your FICO score, and a missed or late payment can result in your credit score to drop.
Federal student loans come with loan limits, which depend on the year and type of loan you are borrowing. For example, freshmen are allowed to borrow up to $ 3,500 federally direct subsidized loans. Third year students can borrow up to $ 5,500 in soft loans.
If your subsidized loans do not cover your costs, you may need to take out additional loans. These can be direct federal unsubsidized loans, MORE LOANS, or private student loans. Every year you need to borrow, you will take out at least one student loan, if not more.
When you borrowed your student loans, you agreed to repay this amount, plus interest, when you graduated or fell below the half-time enrollment rate. By the time you start repaying, your loan may have changed repairers (which is the company that collects your payments), which makes it even more difficult to know how to start payments. But knowing how much you owe and which companies have your loans is a critical step in tracking your loan repayment.
Checking Your Federal Student Loan Balances
If you’ve borrowed money from the US Department of Education, there are a number of ways you can check your student loan balance.
1. Head to the National Student Loans Data System (NSLDS)
The Ministry of Education manages the NSLDS. From here you can create a Federal Student Aid ID (FSA ID) or sign in with your existing account.
The NSLDS will tell you:
- How much you borrowed
- The type of loan you have (for example, whether it is subsidized or not)
- Interest rate for each loan
- Payment status
- Your loan officer
If you have a few loans, you might have a few loan managers.
2. Contact your school
Sometimes not all loans appear in the NSLDS. Loans that you haven’t taken out yourself – like Parent PLUS Loans – will appear under your parents report, not if you search. At the same time, not all lending entities often report to the NSLDS. This means that you may not be able to find all of your loans, especially if you have recently borrowed.
If you want to make sure all of your loans are accounted for, contact your school’s financial aid office. They will be able to view your account information, including any loans that have been processed on your behalf.
Keep in mind that while you may be able to get information about the lender who granted your loan while you were in school, your loan may have changed hands since then. You can always contact the loan manager on file, but you may need to dig a little deeper if you find that your loan has been transferred to another company‘s portfolio.
Check your private student loan balance
Each private student lender manages them differently; there is no national database on private loans. If you don’t know where to start, follow these tips:
- Contact your college or university. Your school’s financial aid office will have the details of your original loan and can notify you of the company that issued your loan.
- Contact your original lender. Your original lender may still be your current loan manager, but that’s not always the case. Contact the original lender to see if they can tell you who has your loans now. You may need to contact many servers to find the most recent.
- Review your credit report. If you don’t know the original lender or where to find them, use AnnualCreditReport.com. This allows you to extract credit reports from the three major credit bureaus: Equifax, Experian, and TransUnion. You will see details about your original loan manager, which will give you a place to start.
Should you refinance or consolidate to simplify repayment?
Keeping control of all your loans is like a part-time job. You should keep an eye on the amount borrowed, the interest rate, the due date and the minimum amount owed each month.
To streamline your payments, you may want to consider consolidating or refinancing your loans.
Federal loan consolidation
A Federal Direct Consolidation Loan brings all of your federal loans together into one easy to manage loan. Your interest rate is fixed and averaged across all of your loans, then rounded up to the next eighth of a percentage point. This is only available for federal student loans; private student loans are not eligible.
You should consolidate if:
You should ignore consolidation if:
- You want to pay off your loans sooner.
- You want a lower interest rate.
- You get discounts on interest rates or other repayment benefits from your current lenders.
- You are already on the right track for an IDR or PSLF plan; consolidation will restart your clock on these programs.
Refinancing of private student loans
Refinancing is similar to consolidation in that you consolidate all of your loans into one manageable loan. But refinancing is only done with private lenders; the federal government does not offer student loan refinancing. This means that you will lose federal loan protections when you refinance federal loans to private loans.
You can refinance private and federal student loans together. You will complete an application with a lender and itemize all of the current student loans that you want to refinance. When you are approved, you will start making a monthly payment on your new loan to your new lender.
You need to refinance if:
- Your credit is good or excellent, and you may earn a lower interest rate than what you are paying now.
- You have several loans from many different lenders, especially private loans.
- You can get a lower monthly payment by extending the term of your loan.
You should avoid refinancing if:
- You don’t have enough credit to earn a lower interest rate.
- Your federal loans are eligible for an IDR plan or you are on the right track for PSLF.
- You want to keep federal protections and benefits, such as adjournment and abstention, in case you run into financial difficulties.
While consolidating and refinancing can simplify your payments, they’re not necessarily the best decision for everyone. Review your loans, including your interest rate, repayment terms, how much you pay each month, and how much you could save if you choose one of these options. If you’re not saving money, or if you might end up paying more over time, you might want to stay on your current repayment schedule for now.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.