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Myth vs. reality: 13 student loan misconceptions

On July 1, 2026, the federal student loan system underwent a major overhaul through the One Big Beautiful Bill Act , significantly altering borrowing options for new graduate and parent borrowers.
Graduate borrowers face new restrictions following the elimination of the Grad PLUS program; Direct unsubsidized loans now cap at up to $20,500 annually with a $100,000 aggregate limit for graduate programs.
Parent PLUS loans now carry a $20,000 annual limit and $65,000 lifetime cap, while new borrowers must choose between the tiered Standard Plan or the repayment Assistance Plan spanning up to 30 years.
Private student loans often require a cosigner, with 96% of undergraduates and 73% of graduate students using one; refinancing federal loans into private ones results in losing access to federal benefits like income-driven repayment.
The Public Service Loan Forgiveness program remains unaffected by recent changes, offering federal student loan forgiveness after 10 years of eligible service. Borrowers should avoid scams charging fees for consolidation, which is always free.

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