7 Myths About Student Loans You Need to Stop Believing

Student loans can help pay for school and put you on the right career path, but they also come with a lot of misconceptions attached to them. Some of these myths are so pervasive that they need to be stopped in their tracks!

Here are seven myths about student loans you need to stop believing, along with information that will help you make the right decisions about your education funding.

1) You Have To Take Out a Loan

One of the biggest myths about student loans is that you have no choice but to take one out. The reality is that a lot of people are able to complete college without borrowing money, and it’s possible for you, too.

If you’re planning on pursuing higher education, then it’s important for you to be aware of what your options are so you can make an informed decision about how much debt you want to take on.

Talk to someone who works at the financial aid office in your school and ask them what they recommend. They should be able to help you figure out which option is best for your situation.

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Remember: No matter what, if you don’t go to college, you will still need a job and will still have some debt because there are other costs associated with life such as food, housing, transportation etc.

You might think that by going to college and taking out a loan, you’ll avoid having any debt after graduation; but this isn’t always true. It’s not impossible, though. And even if it doesn’t work out perfectly, having a degree is better than nothing!

2) Your Parents Can Help

This one is a tough pill to swallow, but it’s true: your parents can’t help you out with student loans. The federal government has strict limits on the amount of money that parents can borrow for their children’s education.

But there are still ways that your family might be able to offer financial assistance. For instance, if you qualify for need-based aid and receive a full scholarship or get other need-based financial aid from the school, then some or all of the remaining cost will be covered by grants and scholarships.

And if your parents are able to make significant sacrifices or take on debt themselves, they may also be able to help pay for college (though this should not be considered a long-term solution).

3) There Are Too Many Choices

Many people believe that there are too many student loan programs and it can be confusing to decide which one is best. This is simply not true, as there are only four types of student loans: federal loans, private bank loans, private non-profit loans, and parent PLUS loans.

The majority of college students use the FAFSA form to determine their eligibility for federal loans (which are funded by the government), so this option is often a good starting point for any type of borrower.

If you do not qualify for federal loans, then either applying for a private bank loan or a private non-profit loan could be worth looking into.

4) The Scholarship Foundation will Help

This is a myth. Scholarship foundations are not banks, they don’t offer loans. They give grants and scholarships and do not provide any help with paying off your student loans.

There may be other scholarships out there that you can apply for, but the scholarship foundation will not help you with your student loans.

✓) The government has my back:

The government doesn’t have your back when it comes to paying back your student loans. In fact, when it comes to federal loans, the Department of Education does nothing to help people repay their debt.

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Federal student loans allow deferment if the borrower becomes unemployed or disabled, though borrowers still need to make payments on their loan while in deferment.

For those who go into forbearance due to economic hardship, interest continues to accrue during this time period as well.

First year students who take out subsidized and unsubsidized Direct Loans also need to keep in mind that they must pay an origination fee (1% of total loan amount) on all new loans disbursed.

5) All For Profit Schools are Crooks

It is worth noting that not all for-profit schools are crooks. In fact, there are many highly reputable for-profit schools, such as the University of Phoenix, DeVry University and Strayer University.

These schools are accredited by the Department of Education and offer degrees in a wide range of fields from business administration to nursings.

The realirealityty is that there are good and bad for profit schools out there. Ultimately, you need to make sure that thethe school you attend is accredited, so your degree will be recognized by employers.

It’s also important to note that a higher tuition doesn’t necessarily mean a better education. In fact, it could mean just the opposite.

6) Scholarships Are Available For Everyone

Scholarships are available for everyone, but not in the way you might think. The truth is that there are many scholarships out there and it is possible for you to get one even if your grades aren’t perfect.

However, the key thing is that they are difficult to come by and they only cover a fraction of what tuition costs these days. They also have an entrance fee which can be quite high (think $100 or more).

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In addition, while they’re easy to apply for through the school’s financial aid office, it may take months before you find out whether or not you’ve been selected.

That said, students who qualify for this type of award should do all they can to apply for as many as possible because each scholarship has its own requirements such as GPA and class rank.

7) All Government Schools are Public

In some cases, the majority of the tuition for a public school is subsidized by the government. Yet, even when this is true, there are still schools that charge a hefty price for tuition and require out-of-state residents to pay higher rates.

There are also many schools that do not receive as much funding from the government and must charge high rates because they need more money to keep their doors open.

Finally, most states have both private and public colleges which mean you can’t assume all schools in your state are public. It’s best to investigate the college’s website or call them directly before making any assumptions about what kind of institution it is.