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MISTAKES TO AVOID —
7 Mistakes That Are Costing Student Loan Borrowers Thousands of Dollars
These are the errors we see over and over again. Avoid them and you could save five or even six figures over the life of your loans.
Mistake #1: Assuming You Don’t Qualify for Forgiveness
The most expensive mistake is never checking. Over 3.7 million borrowers currently have qualifying employment for PSLF based on their employer type alone. Millions more qualify for IDR forgiveness but have never enrolled. It costs nothing to check — and the payoff can be enormous.
Mistake #2: Being on the Wrong Repayment Plan
If you’re pursuing PSLF, you need to be on an income-driven repayment plan (or the Standard 10-year plan). If your servicer put you on a graduated, extended, or non-qualifying plan, your payments may not count toward the 120-payment requirement. Years of payments can be wasted. Check your plan and switch if necessary.
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Mistake #3: Not Submitting the Employment Certification Form Annually
You don’t have to wait until you’ve made 120 payments to submit the ECF. Submitting it annually tracks your progress, catches errors early, and provides documentation in case of disputes. It also ensures your employer is verified as qualifying before you invest years of payments.
Mistake #4: Choosing Forbearance When IDR Payments Could Be $0
When borrowers tell their servicer they can’t afford payments, some servicers recommend forbearance because it’s easy to process. But forbearance doesn’t count toward forgiveness and interest continues accruing. An IDR plan could give you payments as low as $0 per month — and those $0 payments still count toward forgiveness.
Mistake #5: Consolidating at the Wrong Time
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Consolidating after July 1, 2026 locks you into the new RAP plan with 30-year forgiveness. If you need to consolidate to make your loans PSLF-eligible, do it before the deadline.
Mistake #6: Not Claiming the Pension Refund — Wait, Wrong Article. Not Claiming State Programs
Many borrowers focus exclusively on federal programs and ignore state-level assistance. Depending on your state and profession, you could be eligible for an additional $5,000-$50,000 in loan repayment assistance. This money exists specifically for you — but you have to find it and apply.
Mistake #7: Refinancing Federal Loans into Private Loans
If you refinance your federal loans with a private lender, you permanently lose access to all federal forgiveness programs, IDR plans, and protections like deferment and forbearance. The interest rate savings from refinancing rarely outweigh the potential value of forgiveness. Think very carefully before making this decision.
[NEXT PAGE: The Bottom Line — What This All Means for You →]
