Lessons Learned: ‘My Biggest Student Loan Regret’

With back-to-school season in full swing, we know what you’re thinking: shiny new shoes, sharpened pencils and … student loans?

Sure, it may not seem as fun a topic as fall shopping, but with the average student now graduating with nearly $27,000 of debt, planning for higher education is certainly an important to-do to check off your list.

In fact, many of us wish we had done more of just that—planning. When we asked readers in our August Money Challenge about their biggest money mistakes, something kept coming up over and over again: student loans.

So we decided to share some of their biggest regrets over student loans—all, of course, in the spirit of learning from each other's mistakes.

Keep an eye out for our September Money Challenge. Next month's ask: "What money lesson do you wish you were taught in school?"

To see the slides in one long list, click into the slide show and select "list view."

View Slide Show

  • Quzy-Q

    I didn’t realize that I could pay more on my loans each month until I’d already been paying them for years. I only borrowed 20K, but after 10 years and couple of deferments, I’ve only begun to make a dent in what I owe. I’ll be down to 13k in a month or so and I’ve been paying on them since 2001. Yikes!!

  • Sharon

    I received more student loan money than I needed for graduate school (I was also working at the time, so I didn’t need loan money for living expenses). I put the extra money into a high-yield money market account earning 6%. As soon as the loans became due, I repaid them to avoid incurring additional interest. Worked out perfectly!

  • FinaidCounselor

    Regarding slide #1: In the 90′s there was not the PLUS loan federal option. Anything needed that was more than the Stafford loan maximums ($5,500-$7,500 per year) had to be taken out in private loans. There was not another loan option. Financial Aid offices are now required to counsel students who choose to go with private loans only to ensure they know their federal options.

    A lot of private lenders have been made out to be the bad guys but there are situations where they can be preferable. Students who have good credit and/or a cosigner who does and could pay variable loans off quickly if rates went up, can qualify for rates well below the federal loans (2.5%-3% for the best private rates vs. 3.9%-6.41% federal for undergrads and 5.41%-6.41% for graduate students). However, federal loans offer more repayment plans, deferment options, and forgiveness programs. Students who plan to be paying off loans for the foreseeable future or going into public service and looking for loan forgiveness will almost certainly be better off with federal options.