Student loans are a type of financial assistance that help students pay for school tuition and other school-related fees (undergraduate, graduate, etc.). Earning a degree can be very expensive, especially for those that do not receive any financial aid. For many, student loans are their only option to earn a degree for a better future. The hope is to slowly pay them off with time and with a stable job in the future.
Just like most things, there are pros and cons to student loans as well. It’s important to internalize this information before applying for student loans. It is the responsibility of the student to understand how student loans work before applying for them. Student loans definitely have positive aspects to them. Many students are not lucky enough to attain financial aid for higher education. Student loans make higher education attainable for every single person. For many stable jobs, a degree is required and in order to earn a degree, higher education is required. In addition, a successful career is almost always backed up with a degree. A bachelor’s degree is just the start for some and a goal for others. Student loans also provide a perfect opportunity to build up credit history. Building credit history is essential for the future, especially when buying a vehicle, a house, or starting a business.
On the other hand, student loans do have negative aspects to them as well. Having any kind of debt over you is a burden. Loans come with interest rates and affect your credit history if you do not pay them off in a timely manner. In the case that student loans are not taken seriously, many financial difficulties may arise in the future, especially if they are left unpaid. Unfortunately, Americans owe over $1.64 trillion in student loan debt, spread out among about 45 million borrowers. There are penalties that come up if certain installments of student loans are not paid. These penalties can include added fees, added interest and wage garnishment.
Overall, it’s very important to understand these pros and cons of student loans. Student loans are a big responsibility and can definitely be the only way to higher education for many. An education that allows a student to have a successful career and happy life is worth the financial stress of taking out student loans.