Paying for college
Student Loans
Everything about borrowing money for college: loan types, limits, repayment, forgiveness, and how to keep debt manageable from the start.
Student loans are borrowed money that must be repaid with interest. Federal loans come from the government and carry fixed rates and income-based repayment options. Private loans come from lenders and vary widely. Borrowing less, understanding repayment early, and knowing forgiveness rules are the core decisions this section walks you through.
Student loans are the most consequential financial decision most undergraduates make, yet the choices happen quickly, often under application deadlines, with little preparation. This section groups every part of that decision in one place — not because the topics are simple, but because they interact. How much you borrow affects which repayment plan makes sense; the loan type you choose affects whether forgiveness is even available to you.
The pages here follow the order in which most borrowers encounter the decisions. You start by understanding the difference between federal and private loans, because that distinction shapes every rule that follows. You then look at what federal loan types exist and what limits apply to your situation, and at a framework for deciding how much to actually take. From there, repayment plans, forgiveness programs, and the specific paths for parents and graduate students each get their own page.
If you are trying to reduce what you need to borrow in the first place — through grants, scholarships, or savings — that work belongs in Financial Aid & FAFSA, Scholarships & Grants, and College Costs & Savings before you return here. Loans are what you turn to after free money is exhausted, and the size of the gap between cost and free aid is what determines how much borrowing is actually necessary.
This section covers borrowing only — it does not cover grants, scholarships, work-study, or the FAFSA submission process, which live in Financial Aid & FAFSA and Scholarships & Grants. If your question is about reducing what you need to borrow rather than managing what you have already borrowed, start there.
What you need to understand first
Federal vs. private distinction
Federal loans are issued by the U.S. Department of Education and carry fixed interest rates, income-driven repayment options, and access to forgiveness programs. Private loans are issued by banks, credit unions, and other lenders; their rates, terms, and protections vary by lender and by the borrower's credit profile. The distinction determines nearly every rule that applies to your debt.
Interest and capitalization
Interest accrues on the outstanding principal from the moment a loan is disbursed, unless a subsidy covers it during school. When unpaid interest is added to the principal — a process called capitalization — future interest is then calculated on the larger balance. The timing and trigger for capitalization changed for most federal loans on July 1, 2026, affecting borrowers whose loans entered repayment on or after that date.
Loan limits and dependency status
Federal loan programs cap how much a borrower can take per year and in total. The applicable limit depends on the loan type, the borrower's year in school, and whether the student is classified as dependent or independent on the FAFSA. Graduate students and parents have separate programs with different limit structures. No federal loan can exceed the school's published cost of attendance minus other aid received.
Repayment plan selection
Repayment plans determine the monthly payment amount, the repayment timeline, and the total interest paid over the life of the loan. Federal borrowers can choose from standard, graduated, extended, and several income-driven plans. The right plan depends on income, family size, loan balance, and whether the borrower intends to pursue forgiveness. Choosing a plan at repayment entry does not lock the borrower in permanently.
Forgiveness and discharge eligibility
Certain federal loan borrowers can have remaining balances cancelled after meeting specific conditions — typically a combination of qualifying employment, a qualifying repayment plan, and a required number of on-time payments. Discharge is separate and applies when a borrower meets criteria unrelated to employment, such as school closure or permanent disability. Eligibility rules are set by federal statute and regulation, and some rules changed on July 1, 2026.
Refinancing vs. consolidation
Federal loan consolidation combines multiple federal loans into one loan held by the federal government, potentially restoring access to certain repayment and forgiveness programs. Refinancing replaces one or more loans with a new private loan, which can lower the interest rate for borrowers with strong credit but permanently removes access to federal repayment and forgiveness options. The two are not interchangeable.
Guides in this section
Federal vs Private Loans
Federal Loan Types and Limits
How Much to Borrow
Repayment Plans
Forgiveness and Discharge
Parent and Graduate Borrowing
Refinancing and Consolidation
Mistakes to avoid with Student Loans
Accepting the full offered loan amount without question
Why it happens: Loan offers arrive packaged with the financial aid award letter and the full amount is pre-filled, making borrowing the path of least resistance even when partial borrowing would cover the gap.
What to do instead: Calculate the actual shortfall between your confirmed costs and all confirmed free aid, then borrow only that amount — the How Much to Borrow page gives a framework for doing this before you accept.
Treating federal and private loans as interchangeable
Why it happens: Both appear as line items in an aid package and both arrive as disbursements to the school, so the difference is invisible at the point of borrowing.
What to do instead: Exhaust federal borrowing capacity before considering private loans, because federal loans carry repayment protections and forgiveness eligibility that private loans do not — the Federal vs. Private Loans page explains exactly what is at stake.
Ignoring repayment plan choice at loan exit counseling
Why it happens: Exit counseling happens at graduation or withdrawal, when most borrowers are focused on other transitions and default into the standard plan without knowing alternatives exist.
What to do instead: Review income-driven repayment options before your grace period ends, especially if you are entering a lower-paying field or plan to pursue Public Service Loan Forgiveness — the Repayment Plans page explains what each plan requires and who each one suits.
Student Loans: common questions
What is the difference between subsidized and unsubsidized federal loans?
On a subsidized loan, the federal government pays the interest that accrues while you are enrolled at least half-time and during certain deferment periods, so the balance does not grow during school. On an unsubsidized loan, interest accrues from disbursement regardless of enrollment status. Eligibility for subsidized loans is based on financial need as determined by the FAFSA; unsubsidized loans are available without a need requirement.
Do I have to take all the loans in my financial aid package?
No. A financial aid offer is not a bill — it shows the maximum you are eligible to borrow, not an amount you are required to accept. You can accept part of a loan offer, decline loans entirely, or reduce the amount after accepting. Borrowing less than the offered amount reduces your future repayment obligation and the total interest you pay.
When do I start repaying my student loans?
For most federal loans, repayment begins after a grace period that follows graduation, leaving school, or dropping below half-time enrollment. The length of that grace period depends on the loan type. Private loan repayment timelines are set by the lender and vary. Interest may accrue during the grace period depending on the loan type, so the balance at repayment entry may be higher than the amount originally borrowed.
Can I lose access to federal loan forgiveness if I refinance?
Yes. Refinancing federal loans into a private loan permanently removes them from the federal loan system. They are no longer eligible for income-driven repayment plans, Public Service Loan Forgiveness, or any other federal forgiveness or discharge program. The lower interest rate a refinance may offer should be weighed against permanently giving up those protections before proceeding.
Are parent PLUS loans the same as student federal loans?
No. Parent PLUS loans are borrowed in the parent's name and the parent is solely responsible for repayment — the debt does not automatically transfer to the student. They carry a different interest rate from undergraduate federal loans, have different credit requirements, and access to income-driven repayment options has its own rules. The Parent and Graduate Borrowing page covers the distinctions in detail.
What changed about federal student loans on July 1, 2026?
July 1, 2026 is the effective date of regulatory changes that affect several federal loan rules, including interest capitalization triggers and income-driven repayment plan availability. Which version of the rules applies to a borrower generally depends on when their loans were first disbursed or when they entered repayment. The Department of Education's official loan servicer communications and studentaid.gov are the authoritative sources for which rules apply to a specific account.