8 Common Student Loan Myths That Could Be Costing You Thousands
"The goal isn’t more money. The goal is living life on your terms."
—Chris Brogan
Student loan debt is the second-highest form of consumer debt in the U.S., totaling over $1.6 trillion, surpassed only by mortgages. Yet financial wellness is still often left out of the conversation when we talk about living a healthier life.
Most of us were handed our debt without a clear strategy. And the advice we’ve picked up along the way? Often outdated or flat-out wrong.
This isn’t just about money. Financial stress is one of the most powerful predictors of poor physical and mental health. One study in Social Science & Medicine found that adults with high financial debt had significantly higher perceived stress levels and worse general health, even after accounting for income and employment status.
Today I’ll dive into some of the most common myths about student loans that could easily cost you $20,000 to $100,000 over the life of your loan, and what to do about it.
Note: Student loan laws are changing fast. While this advice is based on current rules, upcoming changes could affect your strategy. With all the uncertainty, it may be worth booking a consult with Student Loan Planner to get personalized guidance. Scroll to the bottom for a discount.
Myth #1: "I should pay off my loans as fast as possible."
This is probably the most common advice you’ll hear. And for people with private loans or low balances, it might be true. But for those with federal loans—especially balances above $60,000—it can be the wrong move entirely.
Take someone with $110,000 in federal student loans working at a non-profit hospital. They might qualify for Public Service Loan Forgiveness (PSLF) after 10 years of payments through an income-driven repayment (IDR) plan. In that case, their total repayment might be under $70,000 before the remaining balance is forgiven—while someone trying to pay it off aggressively could spend $120,000 or more over the same time.
Fast isn’t always financially smarter. Sometimes, it’s about knowing which programs to lean on and how to work the system to your advantage.
Myth #2: "Student loan forgiveness is a scam."
The skepticism makes sense. In the early years, approval rates for PSLF were abysmal, less than 2 percent. But things have changed dramatically in the last few years. After the 2022 Limited Waiver and new IDR account adjustments, over $45 billion in federal loans have already been forgiven, with more happening each month.
Student Loan Planner has helped thousands of borrowers navigate forgiveness and, in many cases, they’ve helped people walk away from six-figure balances legally and strategically.
This isn’t some theoretical benefit. It’s happening now. If you're in the wrong plan or your paperwork isn’t aligned with the PSLF or IDR rules, though, you might miss out entirely.
Myth #3: "Refinancing is always a smart move once you graduate."
Refinancing only makes sense if you’re in a secure, high-income job and you’re confident you won’t need the protections federal loans offer.
Refinance too early, and you lose:
Access to IDR plans
Forbearance and deferment options
Eligibility for PSLF and IDR forgiveness
Let’s say someone with $140,000 in federal student loans refinances to a 10-year private loan at 5.5 percent. That’s a monthly payment of roughly $1,500 with no forgiveness on the table. But if they stay in the federal system and qualify for a repayment plan that caps payments at 10 percent of their discretionary income, they might pay closer to $400 to $700 per month, with a large portion forgiven after 10 or 20 years.
That’s a potential six-figure difference in total repayment.
Before you refinance, you need a personalized breakdown of what you’re giving up. Student Loan Planner specializes in that exact analysis.
Myth #4: "I’ll figure it out later."
Waiting to make a plan almost always costs you more. Here’s why:
If you make the wrong type of payment, it might not count toward forgiveness.
If you’re in the wrong repayment plan, your monthly costs may be higher than necessary.
And if you delay consolidating your loans, you could restart your forgiveness clock entirely.
One example: A borrower who waited five years before enrolling in an eligible PSLF repayment plan essentially wasted those five years of payments. That’s tens of thousands of dollars in lost progress—and possibly $60,000 to $100,000 in delayed forgiveness.
The system is complex, but inaction is rarely harmless. Getting a clear, personalized repayment plan can stop that financial leak.
Myth #5: "My loan servicer will guide me through it."
Unfortunately, servicers aren’t financial advisors. They aren’t incentivized to help you pay less. In fact, many borrowers have been misled into forbearance, steered into the wrong repayment plans, or told incorrect information about forgiveness eligibility.
One audit from the Consumer Financial Protection Bureau found that some servicers systematically failed to tell borrowers about PSLF options and miscounted qualifying payments.
If you have $50,000 or $200,000 in loans, you can’t afford to rely on vague advice. You need a specialist who understands the ins and outs of loan law, tax implications, and forgiveness optimization.
Myth #6: "Income-Driven Repayment is only for people with low incomes."
Truth: IDR plans are designed to keep payments affordable based on your income, but they’re not just for low earners.
Let’s say you earn $85,000 as a therapist and owe $120,000 in federal loans. Under the SAVE Plan, your monthly payment might be around $430 per month—far less than the $1,200 you'd pay on a standard 10-year plan.
Even higher-income borrowers can use IDR strategically. For example, dual-income couples can sometimes lower payments through “married filing separately” tax strategies. IDR also unlocks forgiveness after 20 or 25 years, even for those who don't qualify for PSLF.
The key isn’t just how much you earn—it’s how your repayment strategy interacts with your life, income growth, and tax situation. Student Loan Planner has helped thousands map out exactly that.
Myth #7: "My balance is so high, there's no way out."
Truth: The higher your balance, the more forgiveness programs can help.
It’s easy to feel paralyzed if you owe $200,000 or more. But ironically, borrowers with six-figure balances are often the ones who benefit most from advanced repayment strategies.
Example: A healthcare professional with $230,000 in student loans and a household income of $95,000 could qualify for income-driven payments around $600 per month, with the remainder forgiven after 20 years—or sooner if eligible for PSLF.
Trying to pay that off in full would require $2,200 to $2,600 per month for 10 years. That's a crushing burden for most people.
Myth #8: "I'll just wait for blanket forgiveness."
Truth: Waiting for a one-size-fits-all solution can cost you years of progress—and tens of thousands of dollars.
Yes, there’s a lot of talk about widespread forgiveness. But most programs that have actually been enacted target very specific groups—like public servants, those misled by for-profit schools, or borrowers who’ve been in repayment for over 20 years.
If you sit back waiting for Congress to wipe out your loans, you risk missing real opportunities that exist today—like PSLF, SAVE plan benefits, or IDR adjustments already in place.
And even if you’re hoping for forgiveness, you still need to be in the right plan and making qualifying payments.
What To Do
Your repayment plan matters more than you think. And while there's no one-size-fits-all solution, there's almost always a better way than what your servicer offers.
If you’re overwhelmed, stuck, or unsure whether you’re on the right path, I highly recommend scheduling a consult with Student Loan Planner. It's one of the most financially strategic moves you can make if you're carrying five- or six-figure student debt.
The system isn’t fair. But there is a way through it—and getting the right advice can mean the difference between a 20-year financial weight and a clear path forward. At the very least, check out their IDR calculator to find out how much you could save.
Note: SLP just gave MindBodyDad fans $100 OFF a 1:1 consultation using the link below.
