Avoiding Student Loan Mistakes:

Smart Borrowing Tips for Nontraditional Students

You Don’t Have to Go Into Massive Debt to Earn a Degree

Student loans can help you achieve your educational goals—but if you’re not careful, they can also become a long-term burden. As a nontraditional student, veteran, or parent going back to school, you may have different financial responsibilities than a traditional first-year student. That’s why it’s especially important to understand what you’re signing and borrow only what you truly need.

This guide breaks down common student loan traps, including federal PLUS loans and private loans, and introduces safer options—including loan forgiveness programs that might be available to you.

Understand the Types of Loans Before You Sign

Federal Direct Subsidized and Unsubsidized Loans:

These are the most common federal loans and generally offer the lowest interest rates and best repayment options.

Subsidized: Government covers interest while you’re in school
Unsubsidized: Interest accrues while in school
Available to undergraduate and graduate students
Fixed interest rate and access to income-driven repayment plans

PLUS Loans (Parent and Grad PLUS)

These are federal loans with higher interest rates and fewer protections.

Parent PLUS loans are for parents of dependent undergraduate students
Grad PLUS loans are for graduate/professional students
Require a credit check
Interest starts accruing immediately
Less flexible than subsidized/unsubsidized loans

Borrower Beware! Borrowers often take out more than they need, thinking it will “cover everything.” If you’re living on a tight budget, think twice. These loans can snowball quickly.

Tips to Avoid Common Loan Traps

Borrow only what you truly need—not the maximum you're offered
Use FAFSA-based aid first (grants, work-study, subsidized loans)
Avoid using loans for lifestyle costs (vacations, cars, unnecessary upgrades)
Understand interest accrual and capitalized interest
Read loan terms carefully before you accept—ask questions if anything is unclear
Create a simple budget that includes tuition, books, transportation, and living expenses
Use payment calculators to estimate monthly repayment amounts

What If You Already Have Loans?

If you already have student debt—or will soon—there are options for reducing or forgiving some or all of your loan balance.

Public Service Loan Forgiveness (PSLF)

Available to those working in government or nonprofit jobs
Requires 120 qualifying payments under an income-driven plan
Only applies to federal Direct Loans

Military Service Forgiveness

Active-duty service members may qualify for full or partial forgiveness
Veterans with disabilities may be eligible for Total and Permanent Disability (TPD) Discharge
Some branches or MOSs qualify for special repayment programs

Teacher Loan Forgiveness

Up to $17,500 in forgiveness for teachers in low-income schools
Must teach for five consecutive years in an eligible school

Income-Driven Repayment (IDR) Forgiveness

Payments based on your income and family size
Balance forgiven after 20–25 years of qualifying payments
New SAVE plan (starting 2024) offers more generous terms for many borrowers

Image by Washington Bruno Rodrigues Cavalcante

Questions to Ask Before Borrowing Any Student Loan

Do I really need this full amount, or can I reduce it?
Is this loan federal or private?
What’s the interest rate and when does it start accruing?
Are there repayment protections like deferment, forbearance, or forgiveness?
How will this loan impact my monthly budget after graduation?
Will I be eligible for military or public service forgiveness?

Free Loan Planning Tools

Here are some resources to help you borrow wisely and keep your future in focus:

Student Loan Budget Planner
Questions to Ask Before Taking Out a Loan
Loan Forgiveness Program Overview
Sample Communication for Special Circumstances or Discharge Requests