Read this guide to learn how to maximize financial aid, pick a student loan with the best terms, and discover U.S. News' picks for the best private student loans.

A major overhaul of the federal student loan system will take effect in July, introducing new borrowing limits and repayment structures. The Department of Education finalized the changes on Thursday,

Under current rules, borrowers can choose from multiple IDR plans — including the Saving on a Valuable Education (SAVE) plan, Pay as You Earn (PAYE) and Income-Based Repayment (IBR) — which calculate payments based on income and offer forgiveness after 20 to 25 years.

That means more borrowers will be turning to private student loans to bridge the gap. Most student loan applicants, however, are young or new to the workforce and have a thin or nonexistent credit file.

McMahon said her agency is working through thousands of pending cases tied to the PSLF buyback program.

Federal Direct Unsubsidized Loans are often the cheapest borrowing option, followed by Direct Plus Loans and private graduate student loans

Once maxing out federal financial aid, many students turn to private student loans. They can be used for a variety of educational expenses, including tuition, housing, books and computers. Available from traditional banks,