5 things you should know about student loans
This is sad but it’s the reality. Majority of students who graduate from college in the US start their post school life with the worst debt in my opinion called student loans. Some people have gone as far as calling it a life sentence because it can sometimes take a lifetime to repay the debt depending on how much it is and also how you make your payments. The only good thing about these loans is they help you chase your dreams but as we know it does not always work out perfectly. So, below is a list of some basic things prospective students and people who are already paying student loans should know.
- You cannot dissolve student loans in bankruptcy. When people cannot pay some debts, filing for bankruptcy is usually one of the options out but it is not one when it comes to student loans.
- Only take out the minimum needed to cover your tuition. Most students are usually offered more than they need as they are led to believe they might need the money to cover some other unexpected expenses. Some sort of emergency fund. I did that and I am paying the price now paying back the money.
- Student loans have higher interests than buying a house or a car. I never understand why life has to be made so difficult for graduates while it is not guaranteed they will get a job. Since they say education is the key, I believe these loans should have the lowest interest rate.
- If you make lower payments than required based on income, your loan is likely to grow bigger. Many people who cannot make their monthly payments because they are so high get an option to make a lower payment based on income. The problem is the difference between the payment you make and the required payment goes back to your principal which can increase the amount you owe.
- Make payments on your loan if you can while you are in school and during the grace period after graduation. Interest on unsubsidized loan starts to accrue when the loan is disbursed. If you do not pay it will be added to your principal at the end of the grace period.
I think this issue on student loans is going to become a major problem if future students are not educated about how student loans work. It is usually too late when people realize how the whole process works.
I enjoyed reading drugs & student loan debt by KK from Student Debt Survivor.
Do you think most people know enough about student loans before they apply?