While education remains a basic need for all, access to education remains a challenge. For years, student loans bridged the gap allowing students from lower economic backgrounds to access education and other facilities while on campus. Student loans create equality in education for both the rich and the poor by enabling the less privileged to get access to quality schools. The student loan works with the presumption that you will come out of college with the knowledge acquired as the human capital, which will be used to repay the student loan as the principal plus interest. However, it is essential for students to understand the responsibility that comes with student loans and what is expected of them as suggested by Shalom Lamm. In this article, we are going to discuss the pros and cons associated with student loans to help the student be informed.
Pros Associated with a Student Loan:
It Facilitates College Fees
The value of education has increased over the years. Education is progressively becoming expensive, making it inaccessible to a majority of the population. This situation is made worse by the ever-increasing cost of living, making student loans a crucial role in the modern education system. Most students, therefore, have to take the loan to fund their studies.
Facilitates your Dream of Being in Your Dream School
Imagine getting an admission letter from your dream private university. You will take the chance and the cost involved. Private universities are expensive, and for the majority of the citizens, it will be hard to pay. It is at this point that student loans come in handy to help fulfill that dream.
Student Loans Facilitate Other Things Besides Tuition and Room Fees
Most people have a perception that student loan is specific in catering for tuition and school fees. This is not the case, student loans can be used for other uses like; buying textbooks, buying software used in school, or even a laptop. Therefore, students are advised to use their loans wisely in buying things that will be of value to them.
It Can be Used to Determine Your Credit Score
For most students, student loans are, in most cases, the only loan they have on record. This means your activity of how you use your money and the diligence of repayment can be used to determine your credit score.
Cons Associated with Student Loans
Student loans are expensive. When paying for a student’s loan, you pay for the amount you borrowed and included interest on it. This makes payment expensive as suggested by Shalom Lamm. Paying student loans may result in suspending some life goals. Students add on the hard cost of living, minimizing savings. This makes achieving some life goals to be suspended because students can’t be financed at the moment. If defaulted, your credit score is affected negatively.
When your credit score is poorly rated because of default, you will have difficulty finding apartments or credit facilities because your record raises suspicion of your trustworthiness.
With student loans, life starts with debt. Student loans mean you start life with a debt that you will take a long time to repay.
I hope the article was informative and helps you answer all the previously hard questions regarding student loans.