Student Debt
A student loan is a financial help that is meant to support the unable students in paying their school fees including tuition fees, expenses such as books, and those coved in living and also school supplies. Most of the student loans are issued at favorable interest rates to the students. Students are supposed to start paying these loans once the grace period has ended and they have finished their studies.
Student debt is bad because of many reasons. If one is wishing to apply for a student loan, you better think twice before doing so. When these loans are offered, you have to pay it back with interest. The worst thing about having student debt is that you have to pay more than the amount you were initially given because of interest (Baum, 60-70). The average interest rate that is applied to all the student debt is 5.8 percent, although the rate varies depending on which loan type you took. Another reason why student loan is bad is that when you delay the payment of the loan debt, it will result in delinquency ((Baum, 60-70). After graduation from respective colleges, you might be having a moderate income. When student debt is added to the stop, it will be a struggle trying to pay the debt monthly.
Sadly, if the debt payment is not made at the required time, the loan will be delinquent. If after two hundred and seventy days the loan is still delinquent, it will become the default. When the loan becomes the default, there are many repercussions that follow such as loss of eligibility for any more student support, your salary will be trimmed, meaning your boss will be slashing some amount for the loan payment ((Baum, 60-70).
The student loans are necessary when you have an expected return which is of a higher value compared to the debt. A university or college degree can allow you to make a lot of money your lifespan compared to when to engage in working immediately after completion of high school (Harris et al., 1-15).
For current graduates, student debt can be a heavy cross to carry along. There are many activities that you can engage in to reduce the accumulation of student debt. The most profitable way of getting money to cater to the college expenses is getting a part-time job during the weekends, after schools, or even during the summer break (Darolia, Rajeev, and Casandra Harper, 129-150). It is very critical to save the money you get from a part-time job because it will be useful in settling some college expenses. One is not limited to applying for the supports being offered by the school such as the scholarships. There are many companies that are offering scholarships to students that meet a certain requirement. If you’re lucky, scholarships can pay the whole of your school expenses until you complete your education without applying for the student loan (Darolia, Rajeev, and Casandra Harper, 129-150).
Filling out the Free Application for Federal Student Aid (FAFSA). After filling the FAFSA and submitting it, you will receive a Student Aid Report (SAR) informing you that you have qualified for the federal grant, or qualified for a work-study and many other federal aid programs (Darolia, Rajeev, and Casandra Harper, 129-150). This will help in funding your schooling without applying for a student loan.
Article cited
Baum, Sandy. “Student debt: Good, bad, and misunderstood.” Change: The Magazine of Higher Learning 49.3 (2017): 60-70.
Darolia, Rajeev, and Casandra Harper. “Information use and attention deferment in college student loan decisions: Evidence from a debt letter experiment.” Educational Evaluation and Policy Analysis 40.1 (2018): 129-150.
Harris, Diane, Katy Vigurs, and Steven Jones. “Student loans as symbolic violence.” Journal of Higher Education Policy and Management (2020): 1-15.
One Trillion Dollars, Student Debt and Higher Education: Greg Gottesman at TEDxSeattle: https://www.youtube.com/watch?v=1IEkncWZffY&feature=youtu.be