STUDENT LOANS ARE IMPORTANT

Of course we'd all prefer to graduate from college or graduate school with absolutely no student loans. But for the vast majority this just isn't realistic. The numbers of students needing financial assistance is growing and so is the amount they need. Tuition and other college expenses are growing faster than the inflation rate and it's making it very important for student loans to exist in order for kids to attend school.

Students all over the world are always looking for ways to make money and borrow money to pay their tuition, their books and their living expenses. While most students hold part time jobs while they are attending university or college and work at summer jobs, the money they make is usually not enough to pay for all of the expenses they have while they are attending school. Even if they live at home and attend post secondary school in the same city, they often have to turn to student loans to help pay for the tuition and books that they must pay for. Tuition and books alone cost many thousands of dollars and seem to be increasing every year. Applying for a student loan is one alternative that many students will turn to for help.

Every state in the US and province in Canada will handle student loans a bit differently. Each will have their own managed student loan programs so students or parents of students are going to have to do some investigation to find out what programs are available for students and how they go about applying for a student loan. In some cases, especially in the US, students can fill in one application and send it the state run agency. The agency will in turn submit the application to all of the possible student groups that provide financing for students and depending on their criteria and the student’s application will provide a combination of student loans and grants. There are at least three levels of funding: Grants that do not have to be repaid; student loans that must be repaid and do not accrue interest until after the student has either graduated or left school and student loans that begin accruing interest the moment the student loan is provided to the student. This last loan will be at attractive interest rates, however it can be thought of as a personal loan.

Students and their parents must give some careful thought to how much money they apply for vs. how much they spend vs. how much they fund themselves. Student loans must be paid back and if you can avoid having a large student loan when you graduate then you are much better off. Most students are just beginning their careers when they graduate, with plans for purchasing various items such as cars and homes. Student loans can sometimes get in the way of these purchases especially if the student loan is large and the monthly payments take a significant portion of their monthly income.

Unfortunately many students are graduating and getting into jobs that don't pay enough to repay their loans in a reasonable amount of time. This is requiring students to take 20 or 30 years to get their debts paid off instead of using that money to save for retirement, a home, or even their own kids education. We are in a terrible debt cycle and getting the best interest rate possible is very important.