What are student loans and why is it such a necessity for individuals interested in attending college and earning a college degree? A student loan is a loan that was created by a credit bureau agency or the federal government to help students pay for their post-secondary fees. Student loans can be helpful in decreasing a student’s tuition rate as well as paying for their room and board fees, and other essentials that are vital for them to have during their time pursuing a college education.
There is significant amount of loans that individuals can qualify for depending on their marital status, if they are employed, or considered to be independent or dependent. Student loans is the main resource that many individuals are able to attend school, but the downfall of it is that the amount of money that you borrow over time to attend college for your undergraduate or graduate degree will be have to be paid back eventually.
The FAFSA is the most common type of student loan that students will have to apply for at the beginning of each year and will determine how much money they will get depending on their parent’s income or their own if they are an independent student. Most college students are not really actually knowledgeable about student loans and how detrimental it can be in messing up your credit score if you are unable to pay a certain amount over time.
With any loan, an interest is added on to it and will increase over time until the interest is paid off. Many recent college graduates struggle with paying off their student loans because the amount of money that they owe the loan agency might be out of their financial means, which means they are not able to pay their loans and are at very high risk of having serious debt issues.
There are people who have a worth of a $100,000 or more in student loans and have a pursued a career where they will be paying off this bill for the rest of their life because maybe at the time while they were in school they really did not think about the consequences of going to college. Going to any U.S. college is going to be expensive and tends to leave most Americans in quiet a lot of debt.
Federal and private loan agencies give students six months after they have graduated or drop out of school to start paying off their student loans. The downside with a lot of loan agencies is that they can choose how much money an individual need to pay on the loan debt each month. This is one of the things that college admission counselors do not bring up to student who are interested in applying to their university because if the financial aspect of college was discussed more heavily during the admission process, the college rate would be a lot smaller than it is now.
However sometimes, you have to take risk to get to your destiny. Attending college is very expensive and tends to stress so many people out because they might be wondering how they are get the money to stay paying their bill off so their credit score will not dwindle down. It is important that individuals choose an interest rate that they are able to pay off each month because if not, they are always going to be struggling to find a way to get the amount of money they owe as the new month comes around.
I do not expect 18 and 19-year-old college students to be very knowledgeable about finances, however I feel as though the financial aspect of college needs to be discussed more within the high school setting and parents need to have a serious talk with their child about how expensive college really is. Many individuals go into college blindsided at the fact that they have their freedom, however they end up picking up a financial burden they will have to deal with a significant amount of years and whenever they are done paying their loans off to the government.
Student loans can be life-saver for many people who are interested in pursuing a college degree, but at the same time it pushes people to be in debt and affects their finances by lowering their credit score, which can be a burden especially if a person plans to buy a car, house, or etc. in the near future.