Noora
Are College Loans Beneficial or Harmful for The Student In The Long Run?
I'm interested in knowing more about the students experience about taking college loans and whether it helped or harmed the student ability to pay it back after graduation #financial-accounting #college-student #students #student
3 answers
Bryon Sims
Bryon’s Answer
Student loans are a great way to allow people that normally would not be able to afford college the opportunity to attend. The advice I would give to any student that will be relying on student loans is to work to pay off as much as you can during your education by either finding a company to work for that does tuition reimbursement or applying for grants. Students that manage this debt throughout their college years are much more successful at paying it off in a timely manner after school ends sometimes even graduating with no debt if managed well.
Shannon Swanson
Shannon’s Answer
Hello Noora,
Student loans can be a great way for a young adult to develop and build credit! Credit is the trust which allows one to borrow money from a lender with the promise to be paid back at a future date. As you are probably aware, credit (and access to credit) can be very important in life when you are looking to purchase a vehicle or a house or anytime you may need a personal loan from a bank. By responsibly taking out student loans and repaying them on time, you can help to establish and build your credit history.
However, most new graduates run into issues with their student loans when they treat it as "free money" to be used to eat out or other unnecessary expenditures. Keep in mind, you may be offered more than you need for tuition and books each semester and you are not required to take out the full loan amount. There are also different types of loans (subsidized and unsubsidized) that carry different interest rates. When applying for loans, make sure you request the lowest interest payment first and only take out what you need. Most student loans require payments to be made 6 months after you graduate or end "full time" status at your college, and the interest will kick in as well, which can significantly increase the total amount of money you will end up paying towards your loan.
My suggestion - Student loans can be great, but they come with risks! They can allow people access to education they wouldn't otherwise afford and can help new adults establish and build credit. However, make sure you only take out what you need and try to repay this loan as soon as possible (even during college if possible) to avoid extra interest charges. Don't let your student loans haunt you!
