What is a common misconception about federal student loans?

A common misconception about federal student loans is the belief that all loans require immediate payment. In reality, federal student loans typically offer a grace period after graduation or enrollment status changes before repayment begins. This means that borrowers are not required to make immediate payments, allowing them time to secure employment or establish their financial situation before starting repayment. This structure is designed to provide financial relief to students and graduates, enabling them to focus on their career and financial planning.

The other options reflect aspects of federal student loans that are often correctly understood. They are known to have fixed interest rates, cannot easily be transferred to another lender, and provide various benefits, such as deferment and forbearance options, which allow borrowers to temporarily postpone or reduce their loan payments under certain circumstances.