Student Loans: Repayment Plans, Forgiveness, Default, and Discharge

Summary. What kind of loan you have, what you can pay, what can be forgiven, what happens in default, and how to get out.

Part I: Why student loans are strange

Almost every intuition a person has about debt is wrong when applied to a federal student loan.

A normal debt has a statute of limitations, requires a lawsuit and a judgment before wages can be taken, can usually be discharged in bankruptcy, and offers whatever terms the contract states.

A federal student loan has no statute of limitations at all — 20 U.S.C. § 1091a eliminated it expressly. It can be collected by administrative wage garnishment without any lawsuit under 20 U.S.C. § 1095a, and by seizing tax refunds and even a portion of Social Security benefits — the Supreme Court held in Lockhart v. United States that Social Security payments may be offset to collect student loan debt even decades old. And it survives bankruptcy except on a showing of "undue hardship" under 11 U.S.C. § 523(a)(8).

And yet the same loan offers what no private lender would ever offer: payments tied to income rather than to the balance, forgiveness after a term of years, forgiveness after ten years of public service, and discharge if the school closed or defrauded you.

Both halves of that picture are true simultaneously, and the practical lesson follows directly: the borrower who engages with the system does enormously better than the borrower who hides from it. There is no waiting it out. There is no statute of limitations to run. But there is almost always a payment plan, and very often a path to forgiveness.

Part II: The first question — what kind of loan is it?

This determines everything. Answer it before anything else.

Federal loans — issued or guaranteed by the federal government. Most current borrowing is through the Direct Loan Program under 20 U.S.C. § 1087e, implemented at 34 C.F.R. part 685. Older loans may be FFEL loans, made by banks and guaranteed by the government under 20 U.S.C. § 1078 and 34 C.F.R. part 682, or Perkins loans under 34 C.F.R. part 674.

Private loans — from a bank, a credit union, or a specialty lender. These are ordinary contract debts. They have statutes of limitations, they require a lawsuit to collect, they have no income-driven plans, no forgiveness programs, and no administrative discharge.

The distinction matters enormously, and borrowers frequently do not know which they have. Two consequences:

FFEL and Perkins loans are second-class citizens in the federal system. Many benefits — including some forgiveness programs and the best income-driven plans — require Direct loans. The fix is consolidation into a Direct Consolidation Loan, which is free and can be done online. This is the single most common structural mistake in student loan management.
Never refinance federal loans into a private loan without understanding exactly what you are giving up: income-driven repayment, forgiveness eligibility, deferment and forbearance rights, disability and death discharge, and the ability to rehabilitate a default. A lower interest rate is rarely worth all of that, and the decision is irreversible.

How to find out what you have: the federal student aid database lists every federal loan, its type, servicer, balance, and status. Credit reports list private loans. Do both. Many borrowers discover loans they had forgotten or servicers that changed without notice.

Part III: Repayment plans

Standard repayment — fixed payments over ten years. The lowest total interest, the highest monthly payment. This is the default, and for a borrower who can afford it, it is often the right answer.

Graduated repayment — payments start low and rise every two years over ten years. Appealing and usually inferior; it costs more and the rising steps arrive whether income rises or not.

Extended repayment — up to twenty-five years, for higher balances. Lower payments, substantially more interest.

Income-driven repayment — a family of plans setting the payment at a percentage of discretionary income (income above a multiple of the poverty guideline for household size), with the remaining balance forgiven after a term of years. The details of these plans — the percentage, the term, the treatment of unpaid interest, the availability to particular loan types — have been repeatedly revised by regulation and by litigation, and any specific figure should be verified against current rules rather than remembered.

What is stable about income-driven repayment, and what borrowers need to know:

The payment can be as low as zero for a borrower with income below the threshold, and a zero payment still counts toward forgiveness. This is the most important sentence in the entire subject for an unemployed or low-income borrower.
You must recertify income and family size every year. Missing recertification typically throws the borrower back to a standard payment and can capitalize accrued interest. Calendar it.
Household size includes anyone you support, which frequently reduces the payment materially and is frequently under-reported.
Married borrowers must consider filing status. Filing separately can dramatically reduce a payment on some plans, at a tax cost. It is an arithmetic question with a real answer — run it both ways.
Forgiven balances may be taxable depending on the program and the year's law. Public service forgiveness has been treated differently from long-term income-driven forgiveness. Check before assuming.

Part IV: Forgiveness

Public Service Loan Forgiveness is the largest and most valuable program, and the one with the most notorious paperwork.

The four requirements, all of which must be true simultaneously:

Direct loans. FFEL and Perkins do not qualify unless consolidated into Direct.
A qualifying repayment plan — generally an income-driven plan.
Full-time employment by a qualifying employer — government at any level, or a 501(c)(3) nonprofit. It is the employer that qualifies, not the job. A janitor at a public hospital qualifies; a physician at a for-profit hospital does not.
120 qualifying monthly payments, which need not be consecutive.

The traps, in order of how many people they have caught:

Wrong loan type. Years of payments on FFEL loans count for nothing until consolidated — and consolidation historically restarted the count, though rules on crediting prior periods have changed. Verify current treatment.
Wrong repayment plan. Payments made on a standard or extended plan may not count.
Payments made during forbearance or deferment generally do not count. Servicers steered enormous numbers of borrowers into forbearance, costing them years.
Not filing the employment certification form annually. File it every year, and every time you change jobs. It is the only way to know your count is being tracked correctly, and reconstructing employment from a decade ago is miserable.

Teacher Loan Forgiveness — a smaller amount, after five complete and consecutive years teaching full time in a low-income school, with a larger amount for certain math, science, and special education teachers. It cannot be double-counted with public service forgiveness for the same period, so sequence them deliberately.

Income-driven forgiveness — the remaining balance after the plan's term. It requires patience measured in decades and produces a possible tax consequence, but it is real and it is automatic if the payments were made.

Other targeted programs exist for nurses, physicians in shortage areas, military service, and certain state-level professions. They are administered separately, they are frequently under-subscribed, and they are worth asking about.

A note on mass cancellation. Broad executive cancellation of student debt was held to exceed the statutory authority invoked in Biden v. Nebraska. The relevant lesson for a borrower is not political: do not plan around cancellation that has not happened. Enroll in a plan, certify employment, and treat any future relief as a windfall.

Part V: When you cannot pay

Deferment — a postponement, available for unemployment, economic hardship, in-school status, military service, and other categories. On subsidized loans, the government pays the interest during deferment. That makes deferment strictly better than forbearance where it is available.

Forbearance — a postponement in the servicer's discretion or by statutory entitlement in certain cases. Interest accrues on everything, and capitalizes at the end, increasing the balance.

The critical point: an income-driven plan is almost always better than forbearance. A $0 income-driven payment and a forbearance both cost nothing this month. But the $0 payment counts toward forgiveness and the forbearance does not — and forbearance capitalizes interest. Servicers pushed borrowers toward forbearance for years because it is faster to process. Ask for income-driven repayment by name.

Part VI: Default and what it triggers

Federal loans generally enter default after 270 days of non-payment. What follows is unlike ordinary debt collection:

Acceleration. The entire balance becomes due.
Collection costs added to the balance.
Loss of eligibility for further federal aid, deferment, forbearance, and repayment plan choices.
Credit reporting, for years.
Treasury offset — tax refunds, and a portion of Social Security benefits.
Administrative wage garnishment — up to a statutory percentage of disposable pay, without a lawsuit or a judgment, on notice and with a right to a hearing.
Professional license consequences in some states, though this has been curtailed in many.

Two ways out, and the difference matters:

Rehabilitation. Nine on-time monthly payments in ten consecutive months, at an amount based on income — often very small. On completion, the default is removed from the credit report (though the late payments remain), eligibility is restored, and garnishment stops. Rehabilitation is available only once per loan. It is the better option when it is available, precisely because of the credit repair.

Consolidation. Combining defaulted loans into a new Direct Consolidation Loan, generally after three voluntary payments or by agreeing to income-driven repayment. Faster than rehabilitation — weeks rather than ten months — but the default notation remains on the credit report.

Choose rehabilitation if you can wait ten months and want the credit repair. Choose consolidation if you need the default resolved now — for example, to become eligible for aid, to stop an offset before tax season, or to qualify for a mortgage on a timeline.

And note the garnishment hearing right. Before administrative wage garnishment, the borrower is entitled to notice and an opportunity for a hearing, at which financial hardship and the existence of a repayment agreement are both relevant. Requesting the hearing in time generally suspends the garnishment. Very few borrowers request it.

Part VII: Discharge — when the debt simply goes away

Several categories are administrative, not judicial, and they are badly under-used. Authority for most of them sits in 20 U.S.C. § 1087.

Closed school discharge. The school closed while you were enrolled or shortly after you withdrew, and you did not complete the program elsewhere through a teach-out. Full discharge, with refund of payments made.

Borrower defense to repayment. The school misled you — about job placement rates, accreditation, transferability of credits, licensure eligibility, or the cost — in a way that would give rise to a claim under applicable law. The standards and procedures here have been repeatedly rewritten and litigated. Apply anyway; a pending application generally puts collections on hold.

False certification discharge. The school certified your eligibility falsely — for example, admitting a student without a high school diploma where one was required, or certifying someone whose disability made the trained-for job legally unavailable, or signing the loan documents in the borrower's name.

Unpaid refund discharge. The school failed to return money it owed after withdrawal.

Total and permanent disability discharge. Available on a physician's certification, a Social Security determination with a specified review period, or a VA determination of service-connected unemployability. Data matching now identifies many eligible borrowers automatically, but not all — apply if you qualify. There is a post-discharge monitoring period in some routes.

Death discharge. Federal loans are discharged on the borrower's death, and Parent PLUS loans are discharged on the death of either the parent borrower or the student. Private loans usually are not. Provide a death certificate; no family member is obligated to keep paying a discharged federal loan, and collectors sometimes suggest otherwise. See Administering an Estate.

Bankruptcy — the undue hardship standard. 11 U.S.C. § 523(a)(8) excepts educational loans from discharge unless excepting them would impose an undue hardship. Most circuits apply the three-part test from Brunner v. New York State Higher Education Services Corp.: the debtor cannot maintain a minimal standard of living while repaying; that state of affairs is likely to persist for a significant portion of the repayment period; and the debtor has made good-faith efforts to repay.

Two practical points about bankruptcy and student loans:

It requires a separate adversary proceeding within the bankruptcy — not merely listing the debt. In United Student Aid Funds, Inc. v. Espinosa the Supreme Court held that a confirmed plan discharging student loan interest without an adversary proceeding, though legally erroneous, was not void where the creditor received notice and did not object — a decision about finality, not a license to skip the proceeding.
The practical difficulty has been reduced. Federal policy guidance has made the government's position in these cases considerably less adversarial in appropriate circumstances, and attestation-based processes now exist. The old advice that student loans are "never dischargeable" was always an overstatement and is now materially wrong. Ask a bankruptcy lawyer. See Chapter 7 Liquidation and Creditors' Rights.

Part VIII: Private loans

Different rules, and mostly worse ones — but with one advantage.

A statute of limitations exists. Private student loan debt goes stale like any other contract debt, and suits on time-barred debt are a recurring problem. Never make a payment on an old private loan without knowing the limitations period, because a payment can restart the clock.
Collection requires a lawsuit. No administrative garnishment, no tax offset.
The lender must prove the debt. Private student loan portfolios have been sold repeatedly, and the chain of assignment is often poorly documented. Demand the note and the chain of title. See Defending a Debt Collection Lawsuit.
No income-driven plans, no forgiveness, no administrative discharge. Hardship programs exist at lender discretion.
Cosigners are fully liable, and cosigner release provisions exist in many contracts but require an application and are frequently forgotten. Read the promissory note for a release provision.
Bankruptcy treatment is complicated. Some private loans that are not "qualified education loans" — loans exceeding the cost of attendance, or loans for non-eligible programs — may be dischargeable without an undue hardship showing. This is a genuine and under-used argument.

Part IX: Servicers

Loans are serviced by contractors, servicers change, and errors are common: misapplied payments, incorrect plan enrollment, lost paperwork, wrong forgiveness counts, and bad advice steering borrowers into forbearance.

What to do:

Keep everything. Every statement, every letter, every confirmation. Screenshot the account and the payment count periodically. Servicer transfers lose data.
Communicate in writing through the servicer's message system, which creates a dated record.
Escalate in order: servicer complaint, the Department's ombudsman, the Consumer Financial Protection Bureau, and your state attorney general. Complaints in this area produce responses at a rate that surprises people.
Verify the count yourself. Do not assume a forgiveness count is right. Request it, in writing, annually.

Part X: Parent PLUS loans

A category that deserves separate treatment because the rules are worse and the borrowers are older.

The parent is the borrower. The student has no legal obligation.
Parent PLUS loans are ineligible for most income-driven plans directly. The workaround is consolidation into a Direct Consolidation Loan, which then permits one specific income-driven plan. This is a well-known technical maneuver and the entire benefit turns on it.
They are eligible for public service forgiveness — but only after that consolidation, and based on the parent's employment, not the student's.
They are discharged on the death of the parent or of the student.
A parent in retirement facing offset of Social Security benefits should treat this as urgent, since Lockhart permits it.

Part X-A: A note on how this area of law changes

Almost nothing else in this corpus carries the warning that appears at the foot of this article, and it deserves an explanation rather than a footnote.

The substance of student loan law lives less in the statute than in regulations, negotiated rulemaking, agency guidance, and litigation — and all four have been in motion continuously for a decade. Income-driven plan terms have been created, renamed, revised, enjoined, and revived. Borrower defense standards have been rewritten by successive administrations and challenged in court. Payment-count adjustments have been announced, implemented, and modified. Broad cancellation was attempted under one statutory theory, struck down in Biden v. Nebraska, and pursued under others.

What this means for a borrower, practically:

Verify every specific number before relying on it — the percentage of discretionary income, the forgiveness term, the treatment of prior payments. A figure that was right two years ago may not be right now.
The architecture is stable even when the numbers are not. Loan type still determines eligibility. Direct loans are still the gateway. Employment certification still needs filing. Default still has two exits. Those facts have not moved and are unlikely to.
Act now under current rules rather than waiting for better ones. Borrowers who paused, hoping for cancellation, generally did worse than borrowers who enrolled in a plan and accumulated qualifying payments. Enrollment is reversible; lost months are not.
Document everything, contemporaneously. When rules change, the borrowers who benefit are the ones who can prove what they did and when. Screenshots of payment counts, saved confirmations, and copies of every certification form are worth more in this area than in any other consumer context, because the record-keeping on the other side has repeatedly failed.

Part XI: Six borrowers

Amara — $48,000 in Direct loans, working at a county health department

Amara earns $52,000 and thought her loans were hopeless. They are not; she is close to an ideal case.

Her position: Direct loans, a qualifying employer (county government), and a modest income.

What she does:

Enrolls in an income-driven plan, which sets her payment at a fraction of the standard amount.
Submits the employment certification form immediately, and then every year.
Sets a recurring annual reminder for income recertification.
Requests her qualifying payment count in writing each year and saves the response.

After 120 qualifying payments — ten years — the remaining balance is forgiven, and public service forgiveness has been treated as not producing taxable income. She pays perhaps a third of what she borrowed.

The one thing that could ruin it: a period of forbearance. If she loses her job for three months and a servicer offers to "pause" the loans, she should ask instead for income-driven repayment at whatever her new income supports — likely $0. A $0 payment counts. A forbearance month does not.

Dmitri — $90,000 in FFEL loans from 2007, in a nonprofit job for eight years

Dmitri has been making payments for eight years while working at a 501(c)(3), and believes he is eight years into public service forgiveness.

He is not. FFEL loans are not Direct loans, and payments on them do not qualify.

What he must do: consolidate into a Direct Consolidation Loan immediately and enroll in an income-driven plan. Whether any of his prior payments can be credited depends on rules that have changed more than once and that must be checked against current policy — which is exactly why he should act now and document everything, rather than waiting to see.

The lesson, which is worth stating bluntly: loan type is the first thing to verify, before plan, before employer, before anything. Eight years is a devastating thing to lose to a category error.

Ronnie — $23,000 in default, wages being garnished

Ronnie stopped paying in 2019. His wages are now being garnished administratively, with no lawsuit and no judgment, and his tax refund was intercepted.

His options:

Rehabilitation: nine on-time payments in ten months at an income-based amount, often very small. On completion, the default notation comes off his credit report, garnishment stops, and eligibility is restored. Available once.
Consolidation: faster — weeks, not months — but the default stays on the report.

He should also request the garnishment hearing if the notice period has not expired, since requesting it generally suspends the garnishment while the request is pending, and financial hardship is a recognized ground.

Ronnie's answer: rehabilitation, because he can manage the small payments and the credit repair matters for the apartment he wants to rent. If he needed the offset stopped before tax season, consolidation would win on speed.

Teresa — a for-profit school that closed six months after she withdrew

Teresa enrolled in a medical assisting program, was told graduates were placed at a rate that turned out to be fiction, withdrew, and watched the school close.

She has at least two applications to file, and they are not exclusive:

Closed school discharge, if the closure fell within the applicable window of her attendance and she did not complete through a teach-out. This is the cleaner path: full discharge plus refund of payments made.
Borrower defense to repayment, based on the misrepresentations about placement rates.

Practical points: a pending borrower defense application generally puts collection on hold; the standards have been rewritten and litigated repeatedly, so the application should describe the misrepresentation concretely — what she was told, by whom, when, and what she relied on; and she should gather the enrollment agreement, marketing materials, and any recruiter communications now, because they become unavailable when a school dissolves.

Walter — 71, a Parent PLUS loan for a child who graduated in 2006

Walter's Social Security is being offset. He assumed nothing could be done at his age.

Three things can be done:

Resolve the default through rehabilitation or consolidation, which stops the offset.
Consolidate into a Direct Consolidation Loan, which is the only route by which a Parent PLUS borrower reaches an income-driven plan — and on a modest retirement income, that payment may be very small or zero.
Consider whether a disability discharge applies, if his health qualifies.

The offset is legal — Lockhart settled that Social Security may be reached for old student loan debt. But it is also entirely avoidable by getting out of default, which is the point: the collection tools are severe and the exits are open, at the same time.

Nia — $110,000 in private loans, cosigned by her mother

Nia's loans are private, which removes almost every federal tool.

What she still has:

A statute of limitations. Private student loan debt goes stale. She must know her state's period and must not make a payment on a stale debt, because a payment can restart the clock.
A proof problem for the lender. Private student loan portfolios have been sold repeatedly and the chain of assignment is frequently a mess. If sued, demand the note and the complete chain of title.
A cosigner release provision, possibly. Many promissory notes contain one, requiring a set number of on-time payments and a credit check. Almost nobody applies. Read the note.
A bankruptcy argument. Loans exceeding the cost of attendance, or loans for programs not eligible for federal aid, may fall outside the discharge exception entirely — dischargeable without any undue hardship showing. This is genuinely under-used.

What she should not do: default quietly. Private lenders sue, and a default judgment is far worse than a negotiated hardship arrangement.

Part XII: The calendar of a well-managed loan

Once, at the beginning:

Confirm every loan's type, servicer, balance, and status.
Consolidate FFEL or Perkins loans into Direct if forgiveness is in play.
Choose a repayment plan deliberately, not by default.
Set up autopay if it carries an interest reduction — but verify payments post correctly for the first three months.

Every year, on a calendar reminder:

Recertify income and family size for the income-driven plan. Missing this is the most common self-inflicted wound in student loans; it raises the payment and can capitalize interest.
File the employment certification form for public service forgiveness.
Request the qualifying payment count in writing and compare it to your own records.
Download and save the account history — servicers change and data is lost in transfers.

Whenever anything changes:

New job → new employment certification.
Income drop → recertify immediately; do not wait for the annual date, and do not accept forbearance when an income-driven recalculation is available.
Marriage or divorce → run the payment both ways on filing status.
New child → household size changes, and so does the payment.
Servicer transfer → screenshot everything before the transfer and verify the balance and payment count after.

Never:

Never let a default sit. Rehabilitation and consolidation both exist and both work.
Never refinance federal loans privately without listing, on paper, every protection being surrendered.
Never pay a company to do any of this. Every federal application — consolidation, income-driven repayment, forgiveness, rehabilitation, discharge — is free and available directly. Companies that charge for these services are, at best, selling a form you can file yourself in twenty minutes.

Part XIII: The debt-relief scam industry

No area of consumer law attracts more parasites, and the pitch is always the same: a company offers to "enroll you" in a federal program, charges an upfront fee plus a monthly fee, and files a form you could have filed yourself for free.

Every federal application is free. Consolidation, income-driven repayment, employment certification, rehabilitation, closed school discharge, borrower defense, disability discharge — all free, all filed directly with the Department or the servicer, all doable online in under an hour.

The red flags:

An upfront fee for "enrollment," "processing," or "document preparation."
Claims of a special relationship with the Department of Education or access to programs others cannot get.
Urgency — "this program ends this month."
A request for your federal student aid credentials. Never give them out. A company with your login can change your address, your servicer communications, and your plan without your knowledge.
A request that you sign a power of attorney or route payments through the company. Payments made to a third party rather than a servicer are the classic way a borrower's account goes delinquent while they believe they are paying.
Promises of immediate cancellation.

Where to complain if you have been caught: the Consumer Financial Protection Bureau, your state attorney general, and the Federal Trade Commission. Then change your federal aid password, contact your servicer directly to confirm your plan and address of record, and revoke any power of attorney in writing.

And the honest counterpoint: a genuine student loan lawyer, a nonprofit credit counselor, or a legal aid attorney can add real value in complicated cases — a bankruptcy adversary proceeding, a defense to a private loan suit, a borrower defense application with contested facts. The distinction is not fee versus no fee; it is professional advice on a hard question versus a fee for filing a free form.

Part XIV: How student debt interacts with everything else

Buying a house. Mortgage underwriting counts student loan payments in the debt-to-income ratio, and how it counts an income-driven payment — the actual payment, or an imputed percentage of the balance — varies by loan program and has changed over time. A borrower planning a purchase should ask the lender specifically how the payment will be treated, because the answer can move the qualifying amount substantially. See Buying or Selling a Home.

Marriage. Marriage does not make a spouse liable for premarital student loans (absent a cosignature), but it can change an income-driven payment considerably depending on filing status and plan. Run the numbers before the wedding, and again before each tax filing.

Divorce. Student loans are generally the debt of the borrower, but a divorce decree can allocate responsibility between the parties as a matter of contract — which binds the spouses to each other and does not bind the lender. A spouse who agreed to pay and then does not leaves the borrower exposed. See Divorce and Dissolution.

Death. Federal loans are discharged on the borrower's death; Parent PLUS loans on the death of either the parent or the student. Private loans generally are not, and a cosigner remains liable — some private notes even contain automatic default clauses triggered by a cosigner's death, which is a provision worth finding before it triggers.

Credit. Student loans report like other installment debt. A default is severely damaging; rehabilitation removes the default notation (though not the individual late payments), which is the single strongest argument for choosing rehabilitation over consolidation when time allows. Dispute inaccurate reporting through the credit bureaus and the furnisher. See Identity Theft and Credit Reporting.

Taxes. Forgiven debt is sometimes income and sometimes not, depending on the program and the year's law. Public service forgiveness has been treated as non-taxable; long-term income-driven forgiveness has been treated differently at different times. There is also an interest deduction, subject to income limits. Ask before assuming, especially in a year of forgiveness, because a large unexpected tax bill on forgiven debt is a genuinely bad surprise.

Professional licensure. Several states once suspended professional licenses for student loan default. Many have repealed those provisions. If a licensing board raises it, check current state law — the rule may have changed since the board's form was written.

Part XV: Borrowing in the first place

Most of this article is about repair. The cheapest intervention happens before the loan exists, and it is worth stating for the benefit of anyone reading this on behalf of a seventeen-year-old.

Exhaust free money first. Grants and scholarships do not have to be repaid. The federal aid application is the gateway to nearly all of it, including state and institutional aid, and filing it late costs real money because some aid is awarded first-come.

Then subsidized federal loans, on which the government pays interest while you are in school. Then unsubsidized federal loans. Then, reluctantly, everything else.

Understand what a PLUS loan is before signing one. Parent PLUS loans carry higher rates and origination fees, have almost no income-driven options without a technical consolidation maneuver, and place the debt on a person nearing retirement rather than on a person at the start of a career. They are frequently the difference between an affordable school and an unaffordable one — which is a reason to reconsider the school, not to sign the loan.

Private loans last, and only after federal capacity is exhausted. They cost more, offer nothing in hardship, and cannot be undone.

The single most useful number is not the total borrowed but the ratio of total debt to expected first-year salary in the field. A rough and widely used rule: total borrowing that exceeds one year's expected starting salary is very hard to repay on a standard schedule. It is a crude heuristic and it is far better than no heuristic at all, which is what most families use.

Ask the school for its own numbers — completion rate, median debt at graduation by program, and median earnings of graduates. These are published for federally aided programs, and the differences between institutions are enormous.

Two habits that pay for themselves over a lifetime: borrow only what the cost of attendance actually requires rather than accepting the full offered amount, and pay the interest on unsubsidized loans while in school if there is any way to do it, because capitalized interest at graduation quietly enlarges the principal that everything afterward is computed on.

Frequently asked questions

Can student loans be discharged in bankruptcy? Sometimes. The undue hardship standard is demanding but the process has become materially more workable, and some private loans may not be covered by the exception at all.

Do federal student loans ever expire? No. There is no statute of limitations. Private loans do have one.

Should I refinance into a private loan for a lower rate? Almost never for federal loans. You give up income-driven repayment, forgiveness, deferment, disability and death discharge, and rehabilitation — permanently.

My payment is $0 under an income-driven plan. Does that count toward forgiveness? Yes. This is the most valuable fact in the entire subject.

Can they take my tax refund or Social Security? In default, yes — both.

The school closed. Do I still owe? Possibly not. Apply for a closed school discharge, and consider borrower defense.