Student Loan Debt
Student loan debt is easy to rack up over the course of your college years.
Now you need to be educated on what to do about it.
In today's competitive job market, nothing gives you an advantage like having a good education. However, as prices and inflation go up, so does the cost to obtain the piece of paper needed to pad your working resume.
For this reason, students that attend a four-year college borrow the needed money at a rate of 50% or higher. That means that at least half of the students at any institution are in debt to get where they need to be in life.
There are definitely pros and cons to using student loans to get through college, but many students find that their student loan is more than they can handle once they get into the workforce.
Grant, Scholarships or Student LoanThere are several options that a student can use to obtain necessary funding to pay for college.
The first two options, a grant or scholarship, do not need to be repaid. This is the obvious answer to those who want to stay out of debt.
Grants are usually issued based upon the qualifications of the applicant, using both financial and lifestyle criteria.
Scholarships are almost always related to a particular area of interest or academic achievement.
It can take time to dig up the possibilities and put in the applications, but it should be well worth your time. Even so, there isn't always a grant or scholarship that is suitable for your needs, which is why so many people take out a student loan.
Types of Student Loans
When it comes to student loan debt, expect to see three main types available.
First, there is the student loan option, either federally backed or independently funded.
You can also obtain funding with the help of a parent loan, guaranteed by a supporting parent or guardian.
Finally, alternative student loans are emerging as creative solutions for many students.
Each type of student loan has its own parameters and terms.
If you are dealing with a federally backed or funded program, for example, there is a cap on what is allowable to charge for things like interest and fees. Most of these types of student loans are also interest free while you are actively schooling.
There is also the possibility of making adjustments, such as a deferral or lower payments for financial hardships, even when you are in the workforce. For most cases, however, the balance remains, drawing out the student loan and creating more financial strain.
Student loan debt is extremely common. It is just too difficult for many students to work their way through school and families are more strapped than ever for financial flexibility.
The average student carries about $20,000 in student loan debt at graduation, with some ending up as high as $50,000 in the hole. This can take years of work to repay, even if you are in a lucrative field like medicine, law or accounting.
The good news is that you can actively work to eliminate student loan debt on your own. There are resources available that can help make this a reality.
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