With seven in ten college students graduating with student debt AND the average debt load hitting $33,000 in 2014, it’s no surprise that my friends in their 20s are FREAKING OUT. I hunted down eight common myths about student loans to help you stay on top of your loans and pay them off as quickly and cheaply as possible.

8 Student Loan Myths Debunked

Myth 1: You don’t need to worry about loans until after you graduate.

A great way to decrease your student loan debt is by beginning to pay them off before you graduate. For many loans, interest accumulates the entire time you are in school. Yikes! Once you begin to make payments, your unpaid interest is added to your loan balance. This will make your total balance larger. Any payments you make during school (even if it’s just a few $100 or $1,000) will reduce your interest and your overall payments. While rare, you’ll want to check with your loan servicer to make sure there are no prepayment penalties. Even if you choose not to make payments before you graduate, saving money during college (think paid internship or summer job) will help you to be in a better place when you do begin to pay your loans. Thinking about your loans during college is a must.

CHECK OUT ===> Three Essential Student Loan Debt Calculators

Myth 2: Consolidating loans always saves you money.

When you consolidate your loans, you are combining two or more loans into a single new loan with one monthly payment and interest rate. Easier to keep track of, right? Yes, but while you will receive a lower monthly payment, a lower interest rate, or both, this may not save you money in the long run. Your lower monthly payments mean you ultimately pay more over the life of the loan. You also want to beware of consolidating federal loans into a private student loan. Doing so will cause you to lose all repayment options and borrower benefits that come with federal loans. Consider consolidation carefully.

Myth 3: Loans reduce the cost of college.

Student loans DO not reduce the overall cost of college. Actually, the cost of college is increased through interest when you take out loans. Financial Aid letters can seem to imply that they are helping to reduce the cost of college but this is incorrect. Loans simply reduce the amount you pay upfront.

Myth 4: Student loans are “good” debt.

People refer to student loans as good debt because they are an investment in your future. While this is true, too much of a good thing can hurt you. To be able to afford a 10-year repayment plan (as opposed to paying them over a longer term), you want your predicted annual starting salary to be MORE than your total debt.

For example, if you paid $10,000 a year to attend a state school and accrued $40,000 in debt, you would want your starting salary to be $40,000 to pay off your debt easily. Many students choose a college based on experience, program details, or campus and forget to consider cost. Before deciding to take out large student loans, research alternative and choose more affordable options (such as community college or an in-state public university) if necessary.

Myth 5: Student loans don’t affect your credit score.

This common misconception is VERY dangerous. Missing student loan payments does negatively impact your credit score and credit history. Defaulting on loan payments will make it difficult to borrow money for a mortgage, auto loan, or any other purpose. What doesn’t affect your credit score is deferring your loans. When you defer your loans, you are postponing the start of your payments. This is a responsible decision if you have just graduated and are still looking for a job. Ultimately, you want to pay off your loans with on-time regular payments in order to ensure you have a good credit score. Moral of the story? It’s okay to defer but NOT to default.

Myth 6: You have to pay off your student loans in 10 years.

While the standard plan for federal student loans is 10-year repayment plan, there are other options. You may find that the standard plan is too high of a monthly payment. You can extend your repayment period to decrease your monthly payment BUT you will end up paying more interest…a lot more. Still, increasing your repayment period is a better option than defaulting on loans. If or when your income increases, you can always adjust your payment plan. For more information visit LearnVest’s list of all 7 federal loan repayment plans.

Myth 7: You have to pay off ALL loans before saving for retirement.

Many people put off saving for retirement in order to pay back student loans, but this could be a mistake. Retirement contributions often offer tax breaks, company matches, and compounding that are extremely valuable. These benefits often outweigh the amount of interest you will save by making additional payments to your student loans.

“Young borrowers could wind up poorer in the long run if they prioritize rapid debt repayment over saving for retirement,” says TIME Magazine. Meeting your student loan payments and taking advantage of company retirement plans is your best bet for preparing for the future.

Myth 8:  Refinancing your student loans won’t save you money. 

If you have a high credit score and a steady income, refinancing your student loans could save you BIG bucks. For example, if you have $100,000 in student loans at an interest of 7% you’ll pay over $39,000 in interest with a standard 10-year plan. Woah.

If you qualify to refinance your loans at a lower rate, then the amount you pay in interest will decrease….possibly by thousands of dollars. For example, if you qualify for a refinance loan with a 5% interest rate you’ll save over $12,000. For this reason, looking into refinancing your loans may be worth the extra effort.

Did you make any student loan mistakes?