Paying for college
Student Loans
Student loans let you borrow money for school and repay it later. This section explains how borrowing works, what your options are, and how to manage what you owe.
Student loans are borrowed money you repay with interest after leaving school. Federal loans come from the government and carry fixed rates and repayment protections. Private loans come from lenders and have terms set by each lender. The type you choose shapes every decision that follows.
This section covers everything that happens once you decide to borrow: what kinds of loans exist, how much you can or should take, how repayment works, and what happens if you cannot pay or want to exit debt early. The pages are arranged to follow the decisions you actually face, roughly in the order you face them.
The federal-versus-private distinction is the first fork in the road, because the two systems have different rules for interest, repayment flexibility, and forgiveness eligibility. Once you know which system applies to you, the pages on loan types, limits, and how much to borrow help you make a concrete decision. The repayment, forgiveness, and refinancing pages are there when you reach the other side of school.
If you are still filling out the FAFSA, figuring out how grants and scholarships reduce what you need to borrow, or working out the total cost of attending a school, those topics live in the neighbouring Financial Aid & FAFSA, Scholarships & Grants, and College Costs & Savings sections. Start there first if you have not yet exhausted free money. Come back here when you are ready to borrow the rest.
What you need to understand first
Federal vs. private loans
Federal loans are issued by the U.S. Department of Education under terms set by Congress. Private loans are issued by banks, credit unions, and other lenders under terms each sets independently. Federal loans carry fixed interest rates and access to income-driven repayment and forgiveness programs. Private loans may have fixed or variable rates and generally offer fewer protections.
Interest and how it grows
Interest is the cost of borrowing, expressed as a percentage of the outstanding balance. On federal loans, the rate is set by Congress and published each year for loans first disbursed on or after July 1. On private loans, the rate depends on the lender, your credit, and whether you choose a fixed or variable structure. Unpaid interest can capitalize, meaning it is added to your principal and then itself earns interest.
Borrowing limits
Federal loans cap how much you can borrow each year and in total. The limits differ by loan type, year in school, and whether you are a dependent or independent student. The current figures are published by the Department of Education. Private lenders set their own ceilings, often tied to your school's cost of attendance minus other aid already received.
Repayment plans
Federal borrowers can choose from several repayment structures, including fixed monthly payments over a standard term or payments tied to income and family size. Income-driven plans can lower monthly payments but extend the repayment period. A rule change effective July 1, 2026 altered how one income-driven plan calculates payments; borrowers who entered repayment before that date and those who entered after it are subject to different terms.
Forgiveness and discharge
Some federal borrowers may have a remaining balance cancelled after meeting specific conditions, such as working in public service for a required period or making payments under an income-driven plan for a set number of years. Discharge is a separate concept covering cancellation due to school closure, total and permanent disability, or certain other circumstances. Neither applies to private loans unless a lender offers its own limited program.
Refinancing and consolidation
Federal loan consolidation combines multiple federal loans into one loan with a single servicer. Refinancing replaces one or more loans with a new private loan, usually to pursue a lower interest rate. Refinancing federal loans into a private loan permanently removes access to federal repayment plans and forgiveness programs. The trade-off between a lower rate and lost protections is the central question in that section.