Completing a college education is a very tough process. Students must work hard and spend a lot of time studying, and lack of finances adds extra stress. A student needs sufficient funds to cover their living expenses such as food, housing, clothing, etc. and health insurance plus university’s tuition and fees. To get the general idea about expenses, it is important for students to look at catalogues or application information provided by the university. However, tuition fee rates vary depending on the university. Some schools could be cheaper than the others.
Getting university education is a good way of investing for the future because it opens many job opportunities and potential to earn more. Many middle class families begin the college selection process with a grim determination, doing whatever they could to give their children the best possible college education believing that the investment would be worth it. Enrolling their children in the best universities without asking many questions about whether they could afford an annual tuition bill. Many struggling students desperate for financial help end up applying for student loan. Lenders will underwrite big loans without any idea of what the students will earn someday – just like the low doc and no doc loans mortgage lenders who didn’t ask the borrowers for documentation verifying their incomes.
The government and many financial institutions offer various loan programs for students. If you apply for financial aid, you may be offered loans as part of your school’s financial aid offer. A student loan is money you borrow and must pay back with interest. It can be used to pay for university or college tuition fees and to help with living costs. There are two sources of student loans: government or from private sources such as a bank or financial institution. Government loans usually offer lower interest rates and have more flexible repayment options compared with loans from private sources.
Government student loan is not for everyone because not everyone is qualified for it. Those who are qualified may notice that the amount is not enough to cover all of their educational expenses and still need to apply for private student loans to cover their expenses. Student loan options can be overwhelming at first glance. Assess all financial situation and options available in order to pick the student loan that best fit your needs. Many students end up buried in debt when they completed their college education. They cannot walk away with it because it’s nearly impossible to discharge student loan debts under the federal law. It’s utterly depressing for so many people to face decades of payments, limiting the capacity to buy a home and turning off potential life partners.
Under the terms of student loan credit agreement, students are expected to make regular payments or to defer payments if their income falls under a certain level. Postponing repayment is a good option for people planning to go abroad for an extended period of time. A number of programs allow the borrowers to defer payments until they have graduated or completed their studies. Part time students, active in military duty, serving a public service organisation or medical residency can apply for deferment. The borrower is not required to make any payment during deferment period but the interest will continue to accrue. Any unpaid interest will be added to the principal balance at the end of a deferment period. This may increase the total amount of loan and the monthly payments.
It is pretty easy to get a student loan these days. Financial institutions understand that most college student do not have a consistent stream of revenue nor solid money situation, the loans are basically based on future income after completing the course. Most of the loan programs require a co-signer or guarantor who will support the payment if the borrower is unable to pay. The guarantor is typically the parent or guardian. A student, who decided to make a loan, must make sure he understands who is making the loan and the terms and conditions of the loan. A slight difference of a half of a percentage in the interest rate could potentially make a large difference in the total amount of loan. It is strongly recommended that student do some research before applying for the loans that will be the most suitable for him.