Student Loans: What to Consider
Getting a college education can greatly increase your earning potential. Statistics show that those with four-year degrees earn about 60% more than those with no education beyond high school. So if you can come up with the money to attend college, it should be worth it in the long run.
The trouble is, college is quite expensive. Earning a bachelor’s degree costs many thousands of dollars. This is why many students turn to student loans. There is no interest charged while you’re in school, and you do not have to start repaying the loan until you graduate. Still, it’s important to carefully consider a student loan before making a commitment.
If you truly can’t afford college, you can usually get funds that do not have to be paid back. Even if you don’t think you will qualify due to your family income, it’s a good idea to apply for federal student aid. Applying is free, and you might be surprised to learn that you do in fact qualify for some assistance. This aid may not pay all of your expenses, but it can be a big help.
It’s also smart to apply for scholarships. There are scholarships out there for all types of students, not just those at the head of the class. Scholarships are offered for those participating in sports, theatre, clubs and more. Some scholarships are awarded for winning competitions, so it doesn’t matter what kind of student you are.
Federal aid and scholarships can greatly offset the costs of a college education. They can reduce the need for student loans, or possibly even eliminate it.
Disadvantages of Student Loans
Student loans can help us get the education we need to succeed, but they are not without drawbacks. One of the most significant is the time it can take to pay them off. You may end up making payments for decades depending on how much you borrowed. This can make it more difficult to afford the things you want and need in life.
Another drawback is the fact that you may or may not be able to get a job in your field immediately after graduation. Even if you do not get a job right away, you are still obligated to start paying back your loan. If you don’t, it could damage your credit and your wages could be garnished when you do go to work.
Defaulting on student loans can make your life much more difficult. Employers who run credit checks on prospective employees may pass you over if they see you have defaulted. Such a default will remain on your credit history indefinitely, and student loan debt usually cannot be discharged by bankruptcy.
If you find that you need a student loan, try to get one that is backed by the government. Government-backed loans usually have low fixed interest rates and more flexibility in repayment than private student loans. No matter what type of student loan you get, paying it back should be a top priority in your budget. The quicker you can repay it in full, the more you will be able to enjoy the increased income your education brings.