Student Loan Default Prevention

Understanding Student Loan Repayment and Default

Grace Periods

Once you graduate, leave school, or drop below half-time enrollment, you don’t have to begin repaying your federal student loans immediately. This period before repayment begins is called a grace period.

• Federal Stafford Loans (Direct and FFEL Programs): You’ll typically have six months before your first payment is due.

Use this time to get organized—review your loan details, explore repayment options, and prepare your budget.

Making Payments On Time

Your loan servicer will contact you with repayment details, including your first payment due date. It's essential to:

• Pay the full amount due each month
• Pay on time, every time

Missing payments or failing to pay on time can lead to default, which has serious long-term consequences. Remember, student loans are legal obligations, just like a car loan or mortgage.

How to Get Your Loan Information

You can access your full federal loan history through the National Student Loan Data System (NSLDS) at studentaid.gov.

This tool shows:

• Loan types and servicers
• Disbursed and outstanding amounts
• Total loan balances and accrued interest

If you’re unsure who your loan servicer is, visit the Loan Servicer page or call the Federal Student Aid Information Center:

• 1-800-4-FED-AID (1-800-433-3243)
• TTY: 1-800-730-8913

Repayment Plans

You have options when it comes to repaying your loans. Several repayment plans are available to suit different income levels and goals.

• Some plans offer lower monthly payments based on your income.
• Others are structured to help you pay off your loan faster with fixed monthly payments.

Use the Repayment Plan Calculator to explore your options and estimate payments under each plan.

If you have:

• A Direct Loan or FFEL Loan, contact your loan servicer.
• A Perkins Loan, your school is your servicer—reach out directly to the school that issued the loan.

Consequences of Defaulting on a Student Loan

Defaulting on a student loan happens when you fail to make payments for 270 days or more (approximately nine months) on a federal loan. Default has serious and lasting financial consequences that can affect many areas of your life.

1. Credit Damage

Defaulting on a student loan is reported to the national credit bureaus, which can significantly lower your credit score. This can impact your ability to get approved for credit cards, auto loans, mortgages, and even renting an apartment.

2. Wage Garnishment

The federal government can begin garnishing your wages without a court order, taking a portion of your paycheck to repay the loan.

3. Tax Refund and Federal Benefit Seizure

Your federal and state tax refunds, and even a portion of your Social Security benefits, can be withheld to pay off your defaulted loan.

4. Loss of Federal Student Aid Eligibility

Once in default, you are no longer eligible for additional federal financial aid, including grants and loans, until the default is resolved.

5. Additional Fees and Collection Costs

Default can lead to added collection agency fees, legal costs, and capitalized interest, all of which increase the total amount you owe.

6. Difficulty with Housing and Employment

A defaulted loan can appear in background checks, making it harder to rent housing or secure employment, especially for jobs that require financial responsibility.

7. Loss of Repayment Options

Once your loan is in default, you lose access to deferment, forbearance, and income-driven repayment plans. You’ll need to rehabilitate or consolidate your loan to regain eligibility for these options.

8. Long-Term Financial Consequences

A default remains on your credit report for up to seven years, making it harder to rebuild your financial health over time.

10 Ways to Avoid Student Loan Default

Managing your student loans is just as important as earning your degree. Here are ten practical ways to avoid default and stay in good financial standing.

1. Know What You Owe

Log in to studentaid.gov to view your loan amounts, repayment terms, and loan servicer contact information. Understanding your loan details is the first step toward staying on track.

2. Stay in Contact with Your Loan Servicer

Notify your loan servicer of any changes to your address, email, phone number, or enrollment status. They can only help if they can reach you.

3. Choose the Right Repayment Plan

Explore options that fit your budget. Income-driven repayment plans adjust your monthly payment based on your income and family size. Use the Loan Simulator to compare plans.

4. Make Payments On Time

Even small, consistent payments help you avoid default and reduce interest buildup. Set calendar reminders or enroll in auto-debit to stay current.

5. Apply for Deferment or Forbearance if Needed

If you're experiencing temporary financial hardship, you may be eligible to pause payments through deferment or forbearance. Contact your servicer early—don’t wait until you’ve missed a payment.

6. Update Your Enrollment Status

If you're enrolled at least half-time, make sure your school reports your status to the loan servicer. This may qualify you for an in-school deferment.

7. Complete Exit Counseling

If you're graduating, leaving school, or dropping below half-time, complete exit counseling at studentaid.gov to understand your repayment responsibilities.

8. Avoid Borrowing More Than You Need

Only borrow what’s necessary for tuition, books, and essential living expenses. Consider working part-time or applying for grants and scholarships to reduce your loan burden.

9. Create a Budget

Track your income and expenses so you can plan for monthly loan payments. Budgeting helps you stay financially stable and prioritize essential bills.

10. Ask for Help Early

If you’re having trouble making payments or have questions about your loans, contact your servicer or the Financial Aid Office right away. We’re here to help you find solutions before default becomes a risk.

How to View SUSLA’s Cohort Default Rate (CDR)

Option 1: National Student Loan Database System

1. Visit: https://nsldsfap.ed.gov/cdr-searchable-database/school/search
2. Use the search feature to find your school by:
• School Name
• OPE ID (Southern University at Shreveport’s OPE ID is 007686)
• City and State

Option 2: Download Official Data Files

• You may also visit the FSA Partner Connect website: https://studentaid.gov/data-center/student/default
• There, you can download official spreadsheets that include CDRs for all U.S. institutions by fiscal year.

What Is a Cohort Default Rate?

The Cohort Default Rate (CDR) is the percentage of a school’s federal student loan borrowers who enter repayment during a given fiscal year and default within three years. The CDR is used to monitor student loan repayment success and institutional accountability.

For help navigating your repayment options, contact SUSLA Office of Financial Aid & Scholarships:

Connect with Your Financial Aid Team

Southern University at Shreveport
3050 Martin Luther King, Jr. Drive
Shreveport LA 71107
Phone: 318-670-9221 | Fax: 318-670-6313
Email: financialaid@susla.edu

Fall & Spring Office Hours
(Beginning Fall 2025)

• Monday-Friday: 8:00 AM - 5:00 PM

Summer Semester Office Hours

• Monday-Friday: 8:00 AM - 6:00 PM
• Friday: 8:00 AM - 12:00 PM

For more information and to learn what actions to take if you default on your loans, you may visit the Collections website for the Department of Education.