Take a look behind you. Do you see it?… In the far distance - but quickly catching up-are your student loans. That's right, all those loans that you saw only as figures on paper are coming up fast and they're screaming, "Remember us? Pay us off! PAY US OFF!"

If this personified vision of your student loans doesn't chill you to your very core, then how does this make you feel: If you're the average American student, you owe about $17,000 in loans after graduation. Quadruple that amount if you're the average grad school graduate. Some students naively believe that they can outrun or ignore their loans, but they're gonna screw themselves over down the line: lenders are sticklers about being paid back, anal about timely payments, and prepared to completely mess up your credit history.

Now are you feeling scared? Take comfort in the fact that the majority of higher education graduates are in the same boat. Nevertheless, student loan repayment is a big, complicated deal. We'll help you decipher the messy jargon and figure out a plan of action.


If you're like most students, you went through college or grad school idly aware of the fact that you were spending a whopping amount on your education, but not really knowing (or caring) how much it was, where the money was coming from, or how you'd eventually pay it back. We hope you enjoyed those years, because now it's time to pay for them. The first major task to tackle is to figure out who you're paying and how much you owe.

You can find the answers in all those notices that your lender(s) and your school's financial aid office have been sending to you. If you were wise enough to keep most of your notices, then start sorting through them and answer the following questions:

What types of loans did I take out?
How much do I owe in total?
Who is (or are) my lender(s)?

What types of loans did I take out?

Many types of loans exist. Some of the more popular ones are Stafford, Perkins, HEAL, and PLUS loans. You won't have to worry about PLUS (Parent Loans for Undergraduate Students) because that one is your parents' responsibility (suckers!), but mostly everything else is your burden now. Take time to go through all the contracts you signed (and kept a copy of, we hope) and make a list of the loans you have.

How much do I owe in total?

The Department of Education - which decides how much and what types of financial aid you're eligible for - may have offered you $8,000 in loans per semester, but you (or your parents) may have decided that you only needed to borrow $5,000. One way you can figure out how much you actually borrowed is to take a look at the contracts you signed - they should have the dollar amount spelled out to the cent. Another way is to take a look at the notices that your lenders have been mailing you each semester (which tell you how much you borrowed and how much you now owe).

If you come across the financial aid reward letter that lists all the financial aid you're eligible for, be careful not to mix up grants with loans. Grants such as the Pell Grant, the SEOG (Supplemental Education Opportunity Grant), and others do not have to be paid back. It was free money. Rejoice!

Who is/are my lender(s)?

Here's how it usually works: You choose a bank to put up your money, you sign all sorts of forms, then the bank hands you the money in semesterly installments. Usually - but not all the time - the bank then turns around and sells your forms to Sallie Mae for the same amount. Sallie Mae may is no country bumpkin; officially known as the Student Loan Marketing Association, Sallie Mae was established by Congress to generate money for students to borrow, and it is one of the largest loan providers in the country. By selling off loans, banks gain more money to lend other students. What this means for you is that you're now in Sallie Mae's hands.

Sometimes Sallie Mae will decide to turn around and sell your loans off to yet another loan provider (what are you, a two-cent whore?). In this case, the new lender is now responsible for getting you the money you need for school (and getting it all back from you when you graduate). So even if you started off borrowing money from the bank, you could end up owing Sallie Mae, or even Sallie's inbred two-fingered cousin.

All this transferring is done without your permission, but you are informed of each transfer. The amount that you borrowed remains the same, so if you know how much you owe, the only thing you have to do is figure out who you owe it to. Your latest records will tell you who.

If you've thrown out all your notices, contracts, and documentation, you may have just read through all this with a look of sheer horror on your face. Gotcha! While you really should've kept better track of your records, this is one time where you can get away with being a mess. All you have to do is contact your school's financial aid office and ask them about your record. Even if the office can't help you, they'll be able to get you in touch with your state's loan guaranty agency, where you'll be clued in on your debts. Believe us, someone will have a record.

Of course, without any personal records, you won't be able to effectively dispute dates, amounts, or other screw-ups, so if you're still in school, start keeping track of all your records.