“Unlocking the Hidden Truths: 14 Surprising Realities About Student Loans You Never Knew Existed!”
It’s nice to have these options if you need them, but leaning on them for too long can dig you into a deeper hole. They’re more like safety nets than solutions, so try not to rely on them unless absolutely necessary.
4. Refinancing Can Be a Trade-Off
Refinancing can help you snag a lower interest rate, but if you’re refinancing federal loans with a private lender, you’ll lose access to federal benefits like deferment, forbearance, and income-driven repayment plans. This is a huge decision with pros and cons to weigh.
A lower interest rate is tempting, but it’s important to think about the trade-offs. Refinancing is a great option for some, but it’s not for everyone, especially if flexibility is a priority.
5. Income-Driven Repayment Plans Come with a Trade-Off
Federal income-driven repayment plans cap your monthly payment based on your income, making things more manageable. But there’s a catch, these plans often extend the repayment term, so you’ll pay more in interest over time.
The bright side is that some income-driven plans offer forgiveness after 20-25 years. But be prepared, the extended timeline means it’ll take longer to get out from under the debt, so it’s worth considering if this works for your long-term goals.
6. Loan Forgiveness Has Some Fine Print
Loan forgiveness sounds incredible, but it’s not a free pass. Programs like Public Service Loan Forgiveness (PSLF) have strict requirements like working for a qualifying employer, making on-time payments, and sticking with an income-driven plan, to name a few. Missing the mark on any of these could mean losing your eligibility.
