Why applying for a student loan is wise
Updated on June 21, 2019
Contrary to what many people believe, applying for a student loan is wise. Most individuals feel that student loans only add to the annual credit of lenders and offer nothing but debt to the borrower. However, this notion is wrong. As much as lenders target to gain some credit from scholars, they also aim at ensuring that they go to their dream school and learn comfortably while on campus.
Not everyone is capable of paying their tuition fees since not all of our parents are owners of multi-billion companies or presidents. Some students go seeking education, knowing very well that they cannot afford to pay the fees required or cater for the expenses involved. Luckily for them, student loans come in handy.
Among the students who graduated in 2018, at around 70% were able to attain federal and private loans. Fourteen percent of the parents were also awarded federal Parent PLUS loans. These statistics indicate that struggling scholars are given a chance to live like other students who come from affluent families. The money ensures that they have enough for tuition costs, living expenses, transport, learning materials like books and school trips.
When Should You Apply For A Private Student Loan?
Before applying for a private student loan, you should exhaust all other money lending avenues. Borrowing money means that you will have to pay the amount at one point together with the interest accrued. Therefore, you should first try to seek financial assistance from relatives and friends as well as obtain grants and scholarships before considering a private lender. After that, your next step should involve filling the Federal Application for Student Aid (FAFSA) which allows you to get subsidized loans or grants which you donâ€™t have to repay.
The Mistake That Most Students Make
The mistake that most students make is borrowing money that they do not need. Instead of selecting an amount that is adequate to cater for school tuition and living expenses, scholars apply for as much money as possible. College goers like to compete with each other in matters of attire and gadgets.
Therefore, applying for a student loan is not a sin, and it will not mess up your future if you borrow what you need and pay when you should. Ensure that you spend the money wisely once your loan is approved.