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Debt Management

Because your student loan is a responsibility that goes away only when you repay your loan in full, how you handle this obligation can have either a positive or negative effect on your future. Upon graduation, it is strongly recommended that you gather as much information as you can about the loans you've received (even those you may have received as an undergraduate) and the total amount you owe. In addition, you should also make yourself familiar with the many repayment options that are available to assist you in repaying your loans during unexpected financial difficulties or hardships.

Taking Responsibility for Your Student Loan

As you leave school, your life will take on a different focus with new opportunities, challenges, and responsibilities. One of those responsibilities is repaying your student loan. Your student loan is a debt you owe for your education and, although an education isn't a physical object like a car, house, furniture or similar purchases where a loan is needed, you should treat your loan as you would any other kind of debt because the consequences for defaulting on a student loan are the the same; if not similar.

Review the Loans at a Glance FAQ sheet to see details regarding institutional and federal loans you have received while attending UTHealth.

Know What You Owe

  • Know how much you borrowed
  • Know the interest rate for each loan borrowed
  • Know the repayment terms of each loan

    • How long do you have to repay the loan?
    • How much are monthly/quarterly/annual payments?
    • When are payments due?
  • Knowledge about your loan is obtained by keeping good records

    • Keep all of the information regarding your loans filed in a safe place
    • Your chance of defaulting decreases when you maintain good records
    • Keep copies of all your correspondence, canceled checks and any forms you sign

The Consequences of Poor Debt Management

When paying monthly, failure to make a payment for 270 days causes your student loan to go into default. With the number of repayment options available to you, by following the strategies provided here, and by staying in contact with your lender or university, you should be able to maintain a good repayment record to avoid default.

Some of the consequences of default are:

  • You can be sued for the entire amount of the loan
  • Your federal income tax refund can be withheld
  • Other state and federal payments can be withheld
  • If you are employed, your disposable income may be subject to "wage withholding". This means that your employer must deduct as much as 10 percent from your weekly or monthly paycheck to help recover the costs of your default
  • Until satisfactory arrangements have been made to repay the default, you will be ineligible for federal financial aid
  • Negative credit rating

These consequences can be avoided if you "live-by" the debt management strategies. Save yourself future headaches and keep track of your student loan payments.

For more information regarding default prevention visit: