Student loan misconceptions regarding credit and repayment

Common misconceptions regarding student loans often lead to confusion, particularly following recent changes to federal repayment plans and borrowing limits.

One frequent myth is that bad credit prevents access to student loans. While private loans require credit checks—often leading 96% of undergraduates and 73% of graduate students to use a cosigner—most federal student loans do not require a credit check. Eligibility for federal aid is determined by submitting the Free Application for Federal Student Aid (FAFSA).

Another misconception involves paying off loans during school. While students can postpone payments while enrolled at least half-time, unsubsidized federal loans and most private loans begin accruing interest from the date of disbursement. Making payments while in school can help reduce total borrowing costs and interest accumulation.