Start here: the FAFSA
Every path starts with the FAFSA at StudentAid.gov ↗. It's free (anyone charging you to file it is a scam), it takes your family's tax info, and it unlocks grants (free money), work-study, and federal loans. File it even if you think you earn too much — schools use it for their own aid too.
The federal loans, and what they cost now
Rates are fixed for the life of the loan and reset each July for new loans. For loans taken July 2026 through June 2027: 6.52% for undergraduate loans, 8.07% for grad unsubsidized, 9.07% for PLUS — plus a small origination fee taken out up front (about 1.06% on regular loans, about 4.23% on PLUS). Always confirm current numbers at StudentAid.gov; they change every year.
Also new in 2026: the Grad PLUS program ended for new borrowers (July 1, 2026). Grad students now have annual and lifetime caps ($20,500/year and $100,000 total for most grad programs; $50,000/year and $200,000 for professional programs like law or medicine). If a program costs more than the caps allow, that's worth treating as information about the program, not just a financing problem.
How you pay it back — the 2026 system
This is where the law changed most, and where old articles will mislead you:
- SAVE is gone. A court order ended the SAVE plan in March 2026. If you were on it, you'll be notified and get 90 days to pick a new plan — don't ignore that letter.
- New borrowers (loans from July 2026 on) get two choices: a Tiered Standard plan (fixed payments over 10 to 25 years, longer terms for bigger balances) or RAP — the Repayment Assistance Plan. RAP ties your payment to your income (from 1% to 10% of income as it rises, minimum $10 a month, minus $50 per child), waives unpaid interest when you pay on time, and forgives what's left after 30 years.
- Existing borrowers on older income-driven plans have until July 1, 2028 to move to RAP, the Tiered Standard plan, or IBR (Income-Based Repayment — the older income-driven plan that survived).
- PSLF (Public Service Loan Forgiveness) still exists: 120 qualifying payments while working for a qualifying public-service employer, and RAP payments count. Rules about which employers qualify tightened in 2026 — check your employer at StudentAid.gov.
The plain takeaway: the safety net still exists, but it's simpler and somewhat less generous than the 2023-era plans. Which is one more reason for the golden rule below.
How much should you borrow? The one rule
Keep your total borrowing for the whole degree at or below your realistic first-year salary in the field you're entering. Look the number up before you sign anything — the government's own College Scorecard shows real median earnings by school and major. Borrow at that level and a 10-year payoff is uncomfortable but doable. Borrow double it, and the loan starts deciding where you live and what work you can afford to take.
And borrow the minimum offered, not the maximum. The award letter's "offer" is a ceiling, not a suggestion.
Extra checks for for-profit and trade schools
Trade school can be a great financial decision — a two-year program that leads to steady $60,000 work beats plenty of degrees. But the for-profit corner of education produces a large share of loan disasters, so run these checks before signing:
- Look up real outcomes. The federal government now measures whether a program's graduates actually out-earn people who never attended — and programs that fail can lose access to federal loans. Check the program on College Scorecard ↗: median earnings, completion rate, typical debt.
- Ask the recruiter for the job-placement rate in writing — and how they define "placed." A "placement" flipping burgers after a welding program tells you what you need to know.
- Compare the community-college price. The same certificate often exists at a community college for a fraction of the cost. Twenty minutes of checking, thousands of dollars of difference.
- Know your protections exist but are narrow: if a school closes while you're enrolled, or lied to get you to enroll, discharge programs exist (closed-school discharge, borrower defense) — but the current rules are strict, and they only cover federal loans. A private loan for a bad school is just yours.
- Pressure is the tell. "Enroll today, this price expires" is a sales tactic, not an education.
Private student loans: the second resort
After federal loans and any grants are maxed, private loans can fill a gap. Know what you're getting: credit-based rates (most students need a cosigner), no income-driven repayment, no forgiveness, and far fewer hardship options. Two things worth knowing:
- The self-certification form. Federal rules require private lenders to collect a form (via your school) confirming your costs and aid before the loan closes — it exists to make you look at the federal-aid box one more time. Take the hint and check.
- Cosigners are fully on the hook. A cosigner — usually a parent — owes the whole debt if you can't pay, and it sits on their credit. "Cosigner release" after some years of payments is offered by some lenders but never guaranteed, and the CFPB (Consumer Financial Protection Bureau) has found releases are hard to actually get. Cosign with open eyes. More in your first loan.
The warning that never changes
Refinancing a federal loan into a private one is permanent. The CFPB says it plainly: it can't be reversed. You give up income-driven repayment, forgiveness, deferment and forbearance options, and discharge protections — forever — usually to chase a rate. If your loans are private already, refinancing is a normal money decision. If they're federal, read the warning on our refinance page ↗ before any calculator convinces you.