As many student debt borrowers are already aware, paying off student loans can be very overwhelming. Not only is it difficult to find the money to pay off student debt, but it can be hard to keep track of each student loan account a borrower has. As previously mentioned on this website, I personally had four student loan accounts, and some borrowers have many more individual student loans they need to keep tabs on. Since student loan companies can make mistakes when servicing your debt, it is important to carefully keep track of your student loan accounts.
An experience I had a few weeks ago demonstrates how important it is to meticulously review the details of your student loans. As previously mentioned on this website, I paid off all of my student debt over two years ago. Since then, I have not received a letter or email from any of my student loan lenders. However, I recently got a letter in the mail from one of my student loan servicers, which was odd, since I had not received any correspondence in years.
My initial reaction upon receiving this letter was fear, since I thought the student loan company would be asking me for more money. However, when I opened the letter, I discovered that my student loan lender had sent me a check for several hundred dollars! During my student debt repayment saga, I followed suggestion on how to keep track of your student loan accounts, and I did not think that I shelled out more money than necessary to pay off my student debt.
However, my lender informed me that they had miscalculated the minimum monthly payments I was supposed to pay on my student loans. As a result, more interest was allowed to accrue on my student debt than would have accrued if I had paid a higher monthly payment all along. My student loan lender calculated all of the extra interest that had accrued on my student loans, and sent me a check to compensate for this cost.
When I think about this situation, I am not surprised that errors were made when calculating my student loan repayment terms. My student loans were given to multiple servicers over the life of the loans, and having different servicers could increase the likelihood that an error is made. In addition, some of my student loans were originated over a decade ago with hard-copy documents (I’m getting old), which I assume are harder to keep track of than debt that is originated completely with electronic forms.
In any case, this story shows how you should keep track of your student loan accounts in ways that you may not think might be necessary. When I was repaying student loans, I merely made sure that I was paying the proper amount each month toward my debt, and that the principal was being reduced on my loans in proportion to the payments I made on my debt. However, I never thought that the minimum payments themselves could have been wrong, since it requires a lot of math to calculate what your monthly payments should be.
After this experience, I believe that in order to properly keep track of your student loans accounts, you should request all of your student loan documents. This will allow you to see exactly how you are obligated to pay back your student loans and how repayment terms are calculated. I requested my student loan paperwork on a few occasions during my student loan repayment saga, and it is usually pretty easy to obtain these materials.
After receiving all of the relevant documents, you should eyeball repayment terms in your loan materials, and see if they correlate with the payment amounts listed on your accounts. It is relatively easy to multiply the interest rate of your debt with the monthly repayment amount to tell how much interest should accrue each month on your loans. In addition, you can divide the amount of your debt with the number of repayment months to get a general idea of what your monthly payment of principal would be.
If you see any inconsistencies, you should contact your student loan lender immediately. I contacted my student loan lenders a few times when I thought errors were made on my accounts during my student debt repayment saga, and I usually got a response pretty quickly. It is also worth mentioning that you likely will not only be helping yourself when correcting any errors, but other people who are in similar situations as you who might not have noticed that an error was made.
As mentioned previously on this website, one of the easiest ways to keep track of of your student loans is to refinance them. Refinancing usually means that you will only have one student loan account rather than different accounts with multiple student loan companies. Also, If you refinance your student loans, you will be able to more easily discern your student loan repayment terms and can correct any errors that you might see. As previously mentioned, the two student loan refinancing companies we recommend are Splash Financial and Credible. If you use the links above to refinance with these companies, we will receive an incentive we can use to keep the lights on here at Student Debt Diaries! Terms and conditions apply.
All told, everyone should keep track of your student loan accounts, and make sure that you are not shelling out too much money to repay your debt. Although it’s great to get a check in the mail out of the blue, you can’t count on your student loan company accurately calculating your repayment terms or sending you a check if mistakes were made. Be vigilant, and ensure that you are not shelling out any more money than you have to in order to repay your student loans.