Virtually everyone around the world, especially students of knowledge have one or two debts to settle.
The debts are loans secured either in the course or before respective programs. After completion of bachelor degrees or even doctorates program, many use a large chunk of their wages and salaries to settle previous debts, which makes life a little bit complicated after school.
Statistics showed that over 80% of college students in the United States took some form of financial aids, including grants, federal and private student loans, and scholarship.
If you’re a student looking for admission into the college of your choice without having a cent to sponsor your education, take your time to read this article.
According to a report in the United States by U.S News in their annual survey, nearly all college graduates borrowed a loan of $30 000 on average, which makes the total amount of student debts in the United States amounts to $1.46 trillion, and the number keeps increasing.
Is Student Debt Bad?
With new graduates suffering from debt, you might think so. However, not all debt is necessarily bad.
Businesses grow through credit as well as families can take out a mortgage to buy a home. Students take loans as an investment in future earnings and job satisfaction.
As you research, you are likely to find student support and loan options. You may have wondered, “Is financial support equal to student loans?”
Let’s compare student loans with financial aids.
You’ve probably heard of the FAFSA (Free Application for federal student aid).
By completing FAFSA, you can find grants and scholarships for which you can help pay for school.
The best opportunity you can discover through FAFSA is that they can help you save a lot of money and get to the school or program of your choice without financial worries.
Another thing to keep in mind with FAFSA is that you can send the information you share about your application to the schools you want to apply to.
Sharing this information, in addition to saving time, helps schools determine if you qualify for some of their student funds.
A grant as an example of financial aids is gift money given to students by college/university, private entity, state, or federal government of a country. The beneficiary does not have to repay it but has to meet specific requirements.
While both scholarship and grant are gift student does not need to refund, a scholarship is more than just financial need. Also, hardly would you come across scholarship offered by the states or federal government.
Factors like Ethnicity, Academic merit, Field of study to mention a few are factors that determine the eligibility of a scholarship program.
In contrast to financial support through grants and scholarships, you have to pay the proceeds of the student loan, whether the loan is a private one or federal one.
When comparing private student loans to federal student loans, it is generally best to skip private loan options first.
Private student loans mostly have higher interest rates than federal loans.
However, a private student loan may cover the entire cost of education, while the federal loan may not. Before accepting a private loan, you have to perform your due diligence and consider the repayment plan and the reputation of the lender.
Payment of student loans
How long does it take to refund student loans?
It depends on many factors. Other financial liabilities, income and lifestyle, loan size, and current and future debt affect the time needed to repay the loan.
You can’t predict what life will give you in the years to come, so you want your loans (and interest) to be as low as possible. The less you borrow, the easier it will be to repay this amount.
In any case, it is better to pay as soon as possible. This way, you no longer charge interest as it is a waste of money.
Is student debt good debt?
When it comes to borrowing money for support, student loans are similar to mortgages because they are generally considered “good debt.” Both are a tremendous amount of money that takes a long time to return.
With each monthly payment, you prove your creditworthiness and show the lender the ability to repay the loan, which in turn can increase your credit score.
“Take” even some good debt. In the case of a mortgage, you get a house, and its value increases over time. With student loans, you get studies that increase the potential income of your life. That is why these two types of debt are good but not bad.
Bad debt includes credit cards, auto loans, and even personal loans. In the latter case, you have some debt. But as the value of the vehicle goes down immediately after leaving the parking lot, and it happens every year, car loans are still considered “bad debt.”
It is probably not surprising that due to student debt, many young graduates have delayed some critical life decisions such as getting married, saving for retirement, and buying a house or a car.
Take it or not, you don’t have to borrow to attend college. Here are some alternatives that you can consider before getting a student loan.
Explore crowdfunding. Thanks to crowdfunding, you can ask family, friends, friends of parents, and others to contribute to the university/college fund.
First, decide how much money you want to collect. You can use a crowdfunding platform like Indiegogo or GoFindMe. Create a campaign with an honest story about why you need the money.
Share your campaign on social media with your family members and friends.
For example, if you can encourage a group of people to contribute, it may mean reducing the cost of a book or getting help with learning.
Work while you study. Colleges offer part-time work to students in financial emergencies as part of a national curriculum. However, have it in mind that even if you receive professional training, you will not be guaranteed a job and may need to apply and find it.
Apply for either a grant or a scholarship. The government provides grants based on the financial needs of students. Usually, the money is yours, which means you don’t have to worry about repaying it like a student loan.
Like the scholarship, the scholarship does not have to be refunded. Unlike grants, scholarship rights are generally based on academic performance, but not on financial needs.
Student loan debt doesn’t have a burden on your shoulders after you graduate. If you have to get a student loan, at least try to make sure the loan doesn’t exceed your annual salary. So if you plan to earn $ 40,000 in college according to your advice, try to make sure that the student loans are $ 40,000 or less.
Do what you can to minimize student loan debt, and in the future, you will be able to manage less stress and spend more money on your chosen items.