Getting student loans for college is relatively easy and for many students, necessary. The problems start when it’s time to repay those loans after graduation. Student loan repayments can get overwhelming. By the time you’ve cleared the debt, you would have paid thousands of dollars more in accrued interest.

What makes things worse is the many myths surrounding these repayments. Believing in these student loan repayment myths can cause you to make wrong decisions, pushing you further into debt.

Myth #1 – You’re Stuck With The Original Student Loan Repayment Plan

You can change your student loan repayment plan the original doesn’t suit you. And there are several ways you can do this too. The standard repayment plan for federal student loans is 10 years. If you can’t afford the monthly plans, changing over to Income-based, Graduated, Extended, or Pay-As-You-Earn payment plans can help. All of these options connect your monthly payments to your income so the payments are always affordable.

Private student loans don’t offer these solutions. However, even with private loans, you do have options. You can refinance private student loans and change the loan term and make the payments more manageable.

Myth #2 – Income-Driven Repayment Plans Will Lower The Cost Of Your Loan

Believing this myth can cost you a lot by way of higher accrued interest. Income-driven repayment plans help make monthly payments more manageable. They do this by limiting the payments to a percentage of your monthly income. This ensures that the payments are always affordable. Switching to an income-driven repayment plan can be a big help if you’re struggling to keep up with your payments.

The downside of lowering the monthly payments is that it extends the life of the loan. This gives interest on the loan more time to accrue. Paying more by way of accrued interest increases the cost of the loan significantly.

Myth #3 – It’s Easy To Qualify For Forgiveness So There’s No Need To Stress Over Repayments

It’s a mistake to take on excessive student loans thinking they’re easy to forgive. They aren’t. The reality is it can be extremely difficult to qualify for forgiveness. The qualifications themselves are very stringent. To make it worse the terms are mired in fine print that changes over time.

In theory, you should qualify for forgiveness if:

• You work in public service or as a teacher in an underserved area for at least 30 hours a week for up to 10 years
• You’ve completed 120 on-time qualifying payments

Sounds straightforward? It isn’t. Not all federal student loans qualify for forgiveness. You can only get your Direct federal student loans forgiven. Also, you’ll only qualify for forgiveness if you’re employed by specified public service organizations or schools. You may meet all the major requirements for forgiveness but still not qualify because of one minor clause you overlooked. Many borrowers have spent years pursuing forgiveness only to find their application rejected on a technicality.

Myth #4 – Student Loan Repayments Start Immediately After Graduation

No, repayments don’t have to start immediately after graduation. Student borrowers get a six month grace period after graduating before the repayments start. This is to give them time to find appropriate employment with a decent income. Your first student loan repayment will be due six months after graduation day.

Interest starts accruing from the day the loan is disbursed through the grace period till the loan is completely paid off. But payments themselves start only six months after graduation.

Myth #5 – Cold-Calls From Student Forgiveness Groups Will Help

There’s no such thing as a student forgiveness group. Only the federal government can forgive your loans. Nobody from the federal government would call you offering to help with forgiveness. Any cold call you receive offering any type of help related to student loans is a scam and should be treated as such.

Scammers prey on vulnerable borrowers knowing they are easy targets. After they’ve convinced you they are genuine, they’ll ask for your personal information to process the forgiveness. No third party can help facilitate student loan forgiveness. Instead your personal information will be used for identity theft. The scammer can use the information for several fraudulent activities such as applying for credit cards or loans in your name. This will only exacerbate your financial stress.

The best thing you can do is ignore any cold calls or emails from ‘student forgiveness’ groups offering to help. Don’t engage with or reply to the caller or emailer.

Myth #6 – You Should Prioritize Student Loan Repayments Over Other Debt Payments

If you still can’t cover your monthly loan payments, it’s best to first pay off the debt with the highest interest rate. Credit cards typically carry the highest interest so it’s best to pay your credit card bills first. Student loans tend to have lower interest rates. You’ll pay the least on these overdue payments.

Keeping track of the interest rates of all your loans and credit cards will help you make smart decisions.

Myth #7 – Deferment Is The Best Way To Manage Student Loan Repayments

Deferments are a double-edged sword. By postponing your payments, you may ease your current financial stress. However, the loan doesn’t go away. The relief is only temporary. You will have to start making payments when the deferment period ends.

Besides, deferment doesn’t stop the interest from accruing. It keeps accruing right through the deferment period. This could end up costing you even more.

Refinancing is generally the best way to manage student loan repayments. It allows you to change your payment term to suit your financial circumstances. If your credit score has improved since you first took the loan, you may even qualify for a lower rate.