We’ve seen it time and time again: A new student heads into college taking the max amount of student loans possible, oblivious to what this will mean for her financial future. She’s disconnected from reality when it comes to how long it’s going to take her to pay back the loans and the hindrance her debt will cause.
Furthermore, she is completely confused by all of the conflicting information regarding student debt.
If you’re in that same position here are five of the biggest student loan myths busted.
# 1 – My Student Loans Can’t Affect My Credit Scores
If you thought this, you’re wrong.
The activity on your student loans will affect your credit score. If you miss payments, make late payments, or stop paying altogether, your credit score will be negatively impacted.
Keeping your credit score up is important for many reasons. For instance, your credit score will affect the interest rates you receive on future debt, can hurt your employment chances, and cause your insurance premiums to spike.
You can check out 11 more credit myths here.
# 2 – You Have to Payback 100% of Your Student Loans
This depends upon the profession you go into, and the types of loans you accept.
There are student loan forgiveness programs that can help you pay back a portion or all of your student loans. To qualify you generally need to take a government job in an area of high need.
However, people who join the military or the Peace Corps may also qualify for some student loan forgiveness.
You can check out student loan forgiveness by state here.
# 3 – You Don’t Have to Pay Back Your Student Loans If You Can’t Find a Job
You have to pay back your loans whether you find a job or not.
There are some programs that can help if you find yourself in this situation. To inquire about help call your student loan servicer. There should be repayment plans that fit your budget.
# 4 – You Need to Pay Someone to Help You With Your Student Loans
You should never have to pay someone to get help with your student loans. In fact, if you’re already deep in debt and not able to pay back your loans, this is last thing you should do.
When you pay someone they are generally making phone calls on your behalf and getting the same applications that you can get yourself.
If you’re struggling to pay off your loans be proactive – make the calls yourself, don’t hire someone else to do it for you.
# 5 – You Shouldn’t Worry About Your Loans Until After You Graduate
While you technically won’t have to start making payments on your debt until after you graduate, you should very closely monitor the amount of debt you’re taking on from the very beginning.
We’ve heard countless stories from students who financed their way through college not knowing the consequences. The truth is, when you graduate you’ll be left to deal with all of the debt you have taken on.
Don’t take every dollar you can get – only take what you need. After you graduate you need to be proactive in mapping out a plan for paying your debts back.
What other student loan myths have you come across?
This blog post was written as part of a sponsored program for ConsumerInfo.com, Inc., an Experian Company. All views expressed are entirely my own and were not influenced or directed by Experian. This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.