Most young adults of today are carefully planning for their future and when they are about to finish high school, they are eager to pursue a college education. But not every student can afford to go to college. In fact, more than 50% of students in the US can no longer afford it due to the pandemic. Lucky are those who have parents that can provide the funds or have been qualified for a full scholarship. Worry no more, cause there’s another way of fulfilling educational goal through student loans which is very common among many college students nowadays.
Are you in need of student loans? Here are a few information that might help you navigate.
The type of loan that helps students pay for post-secondary education is called a student loan. It is designed for the payment of fees like tuition, books and supplies, and even living expenses. The target people of this loan are those with financial limitations to pursue college education. It is intended to make the cost of attending school manageable by helping pay for qualified educational expenses.
If you are considering to pursue college degree through a student loan, here are some important things that you should know before you dive into a decision.
Types of Student Loans?
Student Loans can be secured either from the federal government or from private financial institution.
- A Federal Student Loan is provided by the federal government and Congress decides on the interest rate for each year. This type is flexible with payment method that can be linked to income once the borrower is already employed. Under certain circumstances, an opportunity for loan forgiveness can be availed.
- A Private Student Loan on the other hand, is a type of loan that students can apply from banks and other financial institutions. A student must present a proof of ability to pay upon application. This is either in a form of a good credit score or with a co-signer which will be liable in case the borrower failed to pay the loan.
Few tips before making a Student Loan
A good research is key so you can forecast your possible income from the job that you are eyeing on. This will give you idea of how much loan you should avail and you can also use it to assess your capability to pay in the future. When borrowing, always think of the realistic amount.
Choose the type of student loan that you think will perfectly serve you. It’s not at all times that a federal student loan can cover most of a student’s financial requirements. In this case, private institutions might be your best option. Consult with your school’s financial desk assistance about it, they might provide you with a preferred lender list.
It is also important to understand that student loan payments do not come right after graduation. A six-month grace period is given so the borrower has ample time to look for a stable job or other sources of income.
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When it comes to student loans, failure to pay due to bankruptcy is not an option. The granted loan will remain until you settle full payment. Inability to pay will give the federal government an authority to deduct it from your income, therefore it is wise to never miss any payment. A student loan is one of life’s major decisions because our future depends on it. Before taking out a student loan, make sure to prepare a solid financial plan to avoid any conflict that can ruin your dreams.