Top five habits borrowers use to manage student loans

Student debt is a front-line issue for many students and families. While multiple studies clearly show that a college degree is the surest path to increasing employment and earnings potential, many young Americans are concerned— rightfully so—about successfully managing their student loans.

Thankfully, students and families can draw on the experience of the millions of student loan borrowers who are successful in repayment.

At Navient, we work closely with borrowers to help them navigate a successful path to repayment. For example, according to the latest data, our customers experienced a default rate 40 percent better than the national average. To learn more, we analyzed the records of 6.8 million customers, and looked for the traits that successful borrowers had in common. We learned that successful student loan borrowers share five attributes, and the best news is that virtually anyone—regardless of how much they borrowed—can practice these positive habits.

First, don’t put off paying your loans. Education loans have a variety of deferment and forbearance options that can help if you truly need a break from payments. However, by keeping these options to a minimum, you can reduce the cost of your loan and shorten the time it takes it pay it off. Our data shows that borrowers who use less than six months of forbearance are nearly twice as likely to be successful in repayment.

We also learned that borrowers who stay connected are more likely to be successful. Our customers who regularly log in to their online account are more successful in repayment. Regular tracking ensures borrowers stay up to date on their balance and payment deadlines. In addition, our website provides important information on repayment options and financial literacy tools. For example, we offer an interactive online series at that provides tips on understanding income-based repayment options, credit scores and more.

Perhaps the most obvious finding is that successful borrowers graduate. Degree holders are more likely to be successful in repayment because they are able to capitalize on the value of their education and increase their earning potential. In fact, those who do not graduate are much more likely to default than degree holders, even though they might have borrowed much less.

Even if you didn’t finish your degree you can still take other steps to actively manage your finances and find the path to successful loan repayment. In fact, staying current on your student loans will keep you eligible for new loans and other aid if you return to school later. If college is still in your future, build a plan to pay for your degree so you’re sure to graduate.

Our research also showed that the longer a borrower sticks with repayment, the more likely he or she is to succeed. Continuing to pay something – even if it is a small percentage of income – is a factor in repayment success. Missing payments can damage your credit and lead to higher costs.

Finally, if you are having trouble with payments, and especially if you have missed one or more, talk to your student loan servicer. The Obama Administration has created more repayment options that allow borrowers pay only what they can afford.  Your servicer is trained to understand the complicated repayment process, and can help you understand your options and choose a plan that works for your budget.

At Navient, nine times out of 10, when we can talk to a struggling federal loan customer, we can help him or her get on an affordable payment plan and avoid default. Further, while only a small percentage of people default on their student loans, we’ve found that the vast majority with defaulted federal student loans did not respond to our outreach.

We also regularly survey those who paid off their loans and ask them to share their tips for success with fellow borrowers. Their advice echoes the five habits suggested by the data. Amber from New York set up the automatic debit option and made payments even when it was tough so that she paid minimum interest. Anh from California checked her loan balances and notified her servicer when her financial situation changed.

Amy from Connecticut put it this way: “If I felt that I was going to run into financial difficulties, I reached out to my loan service provider for options. I didn't feel alone.”

We frequently hear from customers who are motivated as they make progress. “As you see the debt going down, you’ll get excited and secure in knowing you have a system to pay it off,” says New York-based customer Arron.

Student loan borrowers who understand where they stand, make continuous progress, and communicate when they are struggling are the most likely to succeed. For young Americans beginning to pay back their college loans, adopting these practices can help put them on a path to successfully manage their college loans and build a strong financial record.

Jack Remondi is president and CEO of Navient, the nation’s leading loan management, servicing, and asset recovery company. Navient services student loans for more than 12 million customers. Learn more at