Student Loans

Getting an education is one of the best things a person can do to stabilize their future. It is also one of the most expensive things you will ever buy. Most people cannot afford to go to school and to be able to do so take out loans that will reach far into most people’s futures and possibly into retirement. Most students take out these loans with little understanding of how or when they need to do something about them.

            Student loans can be a form of “good debt” if the student understands how this investment works. It is an investment in education that you agree to pay later usually six months to a year after the completion of your program is when you need to start paying on them. While anyone that will be running a financial check on you will see the debt, if they also see you are making consistent payments on that debt you are shown to be reliable for your bills.

• How to Borrow

To begin with; the more you borrow the harder it is to repay. Student loan debt is a serious burden, but if the student is well informed about their responsibilities, they can approach them as adults and take responsibility for them. To do so means you are minimizing your burden. There are ways around make this debt. You can:

• Apply for grants and scholarships.
  • Work part-time to pay for some of the education.
  • Attend a less expensive school or go to a state school
  • Plan to buy used books and inexpensive food.

These are all things you can do before leaving to attend school. A lot of them will give you real-life experiences and help you leave for school with a bit of money in your pocket and maybe a start to your resume. Just remember; for every dollar, you get for your education you will need to pay back with interest at some point in the future.

• What Makes Student Loans So Unique?

Student loans are designed specifically for educational purposes and have special clauses built into them. The best private student loans tend to have lower costs than other types of loans and there are several different ones that can keep the costs down as well.

• If you borrow from the federal government the interest rates are relatively low and fixed for new borrowers so there will be no surprises when it comes to the costs.
  • Some interest costs can be subsidized (paid for by the government)
  • Student loans are relatively low-risk loans for lenders.

         Student loans are easy to get approved for and while most students do not have a lot of money to work with or credit scores to prove their worth, federal student loans don’t require a credit score. This is the type of loan to establish your credit history with.  It will make it easier for you to get approved for a loan in the future if you are consistent with your student loan payments.

• Benefits

         Student loans tend to be borrower-friendly loans. It makes repayment of these loans easy and manageable. No matter where the loan comes from, the lenders tend to be flexible. You can:

• Loan Deferment
  • For some loans, if you are enrolled in school you do not need to start making payment. Your loans may also be subsidized during this time or even paid on so you do not accrue more debt.
  • For federal student loans through this can apply to other loans as well you can apply for unemployment deferment. It means you can stop making payments while you are unemployed until such time you get a job.
  • You can also file paperwork to show you currently have limited income get your payments adjusted to match the amount you are making.
  • In many cases, you can get benefits for paying on your student loans as a tax credit. It can reduce the amount of taxes you pay every year. Though it may be limited on the amount of your income and other factors how much you can claim on your taxes.
  • You can apply for loan forgiveness If you work in certain public service jobs. This usually is only applicable after ten years though you may also qualify for a 10-year plan.
• Federal Student Loans

         Loan offered through government programs tends to be more affordable than through private lenders. They also offer more borrower-friendly help and most anyone can qualify to get one. They also offer the most benefits for loan repayment if you start to have difficulties.

• Private Student Loans

Private lenders are banks, credit unions, and online vendors offer similar student loans to those offered by the federal government, but there are other things you need to do to get them.

• Typically, private lenders require you to be approved for the loan which means you need to prove you have a credit history, which is something younger scholars will not have. To take this route many students need their parent’s to cosign the loan which makes both parties responsible when the loan is repaid and puts both parties at risk.
• Private Banks are more likely to give student loans with variable rates whereas the government loans are fixed. It means it is more likely this type of loan will see a rate increase which could raise your minimum payments significantly.

• How to Get Student Loans

         There are many ways to get student loans. Start by talking with your school counselor and get all the facts. You can also visit the FASFA website which will provide you with more information and paperwork to fill out if you ultimately want to pursue a student loan. You can apply for scholarships through your financial aid office or do searches online for ones you may be qualified for. Do your research before you make your choice. It will be a big one.