When it comes to taking out a student loan, you need to do your due diligence and research.
Otherwise, you will hear many things and read up on a lot of things that might be untrue. There are plenty of student loan myths out there that could lead you to make a mistake when applying for a loan. And, when it comes to student loans, mistakes can be very costly.
Here are some of the most common student loan myths to be on that you should be aware of.
Common Student Loan Myths Debunked
1: Student Loan Forgiveness Is Available For Everyone Who Can’t Afford Student Loans
Well, this is not totally a myth. But it’s not true 100% of the time. Here’s the deal…
Federal student loans are the only ones eligible for student loan forgiveness. And to receive the said forgiveness, you will still need to enroll in an income-driven repayment plan.
Forgiveness is not an option with private loans. Just something to keep in mind as you’re evaluating your options.
2: A Consolidation Service Can Save The Day
The truth is, you do not have to waste your money by hiring a student loan consolidation service. You do not have to pay any fees to consolidate your student loans or student loan refinancing. Why? Well, because both of these have no fees. Any money you pay through a third-party service will be wasted.
3: Lower Your Interest Rate Through Consideration
Interests on federal student loans won’t be lowered by student loan consolidation. Your best bet for getting a lower interest rate is by using student loan refinancing.
4: You Can Use Student Loan Forgiveness For Free
While it is true that your income-driven repayment plan can help lead to student loan forgiveness (only applicable for federal student loans), it is still not free. In essence, you are only trading up your student loan debt for a tax bill. It may sound exciting, but it only means you may owe income taxes on the amount of student loan forgiveness you receive.
5: Rely On Student Loan Servicer, They Know Best
At the end of the day, this is your loan, and this is your debt. It is your duty to do your research and get all the answers you need. Sure, you may get advice from a student loan servicer. However, there is no guarantee that it will be the best advice for you. These companies have their own biases and interests that influence the advice they give.
It is always best to be informed. This way, you are familiar with every advice given to you, and you can weigh your options regarding what will be the best decision for you.
This article is part of our series: Student Loan Advice for Online College Students
The next article in the series is: Student Loan Scams
