Not many people can get through college without incurring some form of debt. Even with full academic scholarships there can be unforeseen expenses that can mean the difference between a semester of studying and one spent working a part-time job. The sad reality is that most parents never save enough money for their children to attend school.
There is money available but only if you make a certain amount or less. Most people must take out student loans in order to attend school. There is a lot of information to process about student loans. If you have questions regarding student loans, this article is for you.
What are student loans?
Student loans are exactly as they sound. They are loans designed to help students with their educational expenses. Most students need money for college tuition, books, lab fees and living expenses.
Granted there are federal programs that give students money for school, such as Pell Grants, but these are income based. If the parents make too much, they must rely on savings, scholarships and loans to cover the expenses.
How do I apply for student loans?
The first thing you need to do is go to the college, university or vocational school and enroll. The second item on your "to do" list is to fill out a Federal Student Aid Application.
It will take several weeks for the application to be processed and notification of monetary award sent to the school and yourself. This is not something that can be rushed so make sure to allow enough time by doing this as early as possible.
How much money should I take out?
This is a hard question to answer. Ideally you should take out only what you need to cover tuition, fees, books and living expenses. There are a couple of questions you need to ask yourself. Are you going to be working?
If so... how many hours will you be able to work after you factor in class time and study time. If you are involved in collegiate sports you may not have the time to work. Will you be receiving any aid from anyone else such as spouse or parents?
Try to take out just what you will need. Remember that you will have to pay all of this back so let that be your guide in determining how much to take out in loans.
When do I have to start paying the loan back?
For Federal student loans you do not have to begin repaying until six months after you leave school. This is considered a grace period. For all other types of loans you will begin repayment within sixty days of your first disbursement.
That means you will be paying at least the interest payment while you are enrolled. That is why so many people go with Federal student loans over private loans.
I'm unemployed and my student loans are due, what can I do if I can't make the payment?
The first thing you should do is contact your lender. Explain to them the situation. For Federal loans you can file for a forbearance that will delay when you must make payments. They have the option in granting you this privilege.
Always make sure and keep in contact with your lender. Keep them apprised of your financial situation and try to begin repayment as soon as possible. For other types of loans you will need to contact your bank or the company who gave you the private loan. They may or may not have a program to help you through your financial rough spot.
Student loans are both a blessing and a curse to college students all across the country. On one hand, student loans allow you to have the money you need in many cases to attend college at all. On the other hand, most college students, particularly those entering college for the first time have inflated opinions of their starting salaries upon graduation and the bills they will face while living in the real world. In fact, most freshmen college students have no real concept of the limits of money in which to base their decisions as to whether or not they can realistically expect to repay those funds once they've graduated college.
The sad truth is that many college graduates find that for the first 10-15 years after they have graduated college, they are essentially indentured servants to their student loan debts. There are many reasons for this and different college graduates will find different things about their student loans when the appropriate time comes. First of all, those taking out student loans need to understand that a college degree does not guarantee a high starting salary. Beyond that, a college degree is no guarantee that there will be employers lining up to take your name and number upon graduation. The truth is that most college grads take anywhere from 6 months to a year to find a job in their fields and even then the starting salaries are often far less than anticipated.
Part of the blame for over-inflated expectations is the fault of universities attempting to validate their high tuition rates by displaying average starting salaries of only those that have successful offers in the field of study immediately upon graduation (which usually indicates a history of working with the company or another company as an intern prior to being hired) and not those students who have no prior work experience in their chosen fields. Part of the expectations is students reading job advertisements for experienced workers in a field and assuming that an education will provide the experience that employers require. Regardless of the reason, most starting salary expectations are not realistic in light of the current market.
The problem is that for many students a student loan is the difference in receiving a college education or not receiving one. For these students, there is no option. The price they will pay (with interest) for having student loans in order to get through the educational process will repay itself over the course of a lifetime if they are wise about making the necessary payments and stay on top of things such as consolidation loans and making payments on time.
Student loans are a great tool for those who have no other options when it comes to attending and affording to attend a university. On the other hand, for those who do not have an absolute need for the funds a student loan can provide they can prove to be problematic when trying to establish your career and your lifestyle upon graduation. This is a tool for education that should be used sparingly at best.
Whether or not you choose to take out student loans in order to fund your college education it is a good idea if you exhaust all other available resources first. Check out your options for grants, scholarships, and work-study programs before leaping into student loans to pay for your education.
Both Mike Selvon & Justin Sloan are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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