The student loan industry is booming. Students are borrowing more than ever, and the total outstanding student debt in the United States has surpassed $1.5 trillion. However, what most don’t know is that even if you do make your payments on time, you may still be subject to collection fees, interest rate hikes, and other penalties for not making good on your payments. If you’re struggling with student loans, you can get some financial relief by exploring your options.
Student loans are an essential part of life, but there is a lot you need to know before you start school.
As a college student, you may have heard that going into debt isn’t all bad. Some say that it’s good for your financial health.
However, what you may not know is that when you take out student loans, they are more expensive than your average loan and are often harder to get approved for.
You may have heard horror stories of people being denied, but we’ve got some tips to help you avoid that.
There is no better feeling than being able to go to school and pursue your dreams. That’s why most people work so hard to get their degree to be financially prepared to pay for school. More than 90% of students take out loans to pay for school. For many people, that means taking on a hefty student loan bill.
Student loan debt in the United States
However, this is not the case for everyone. For instance, in 2016, over 44% of college students who graduated from public universities took out at least one private student loan.
According to the U.S. Department of Education data, the average student loan debt at graduation is around $29,000. This number is expected to rise to about $40,000 by 2020.
While this number may seem scary, it’s normal for students to take out loans to fund their education. The average student loan balance is expected to rise as tuition increases, and the unemployment rate remains high.
Student loans are not always a bad thing, and if you’re diligent about paying them back, you can build a solid credit score.
Student loans and bankruptcy
Many people think that you can go bankrupt if you default on your student loans. However, this is not the case.
Student loans are an essential part of our society. When we don’t graduate and don’t have jobs, the government will come after us.
Even though you have to make payments on your student loans, you won’t go bankrupt. It’s possible to refinance your student loans, and there are other ways to deal with them.
What are subsidized Stafford Loans?
Student loans can be complicated. There are different types and repayment plans, and you have to choose the right loan.
You might think that the best student loans are unsubsidized Stafford Loans because they’re the most flexible. But there is more to the story than just that.
Here’s what you need to know about the different types of student loans:
Subsidized Stafford Loans: This type of loan is generally considered the best type of student loan. These are the most common loans that most people will use. They’re the least expensive, and they have low interest rates.
However, subsidized Stafford Loans are the only loans that the government doesn’t guarantee. If you can’t afford to repay them, you’ll lose money.
Unsubsidized Stafford Loans: These loans are often considered the worst student loans. They can be costly, and they have higher interest rates.
However, these loans are the ones that the government guarantees. If you default on them, you could lose your home.
How to deal with student loan payments
If you’re thinking, “I’ll never be able to repay my loans”, you’re already paying.
The only way to make sure you never have to worry about student loans is to keep yourself out of trouble. This means having a good work ethic and being ready to learn.
It’s not just about making good grades. Being a well-rounded student is the best way to prepare for the real world.
It’s always good to have money saved, but if you’re struggling to do so, don’t panic. If you’re an intelligent consumer, you can find ways to save while still enjoying the finer things in life.
Frequently asked questions About Student Loans.
Q: How much student loan debt should I expect to have by the time I graduate from college?
A: According to the National Institute for Student Financial Assistance (NISFA), the average student has approximately $27,000 in student loans by graduation day.
Q: What kind of debt do you think students should expect?
A: A student should expect to owe about $27,000 before graduation.
Q: How does the interest rate on student loans compare to other forms of borrowing?
A: The interest rate on federal loans varies but typically starts at around 7 percent, drops to 3 percent or less if you make on-time payments, and can go as high as 12 percent or more for borrowers with bad credit.
Top myths about Student Loans
1. Everyone can get student loans.
2. Everyone with a job gets student loans.
3. Everyone who wants to go to college should get student loans.
4. If you don’t have a good job, you can’t get student loans.
5. No one will take your student loans out of your paycheck.
Student loans are a crucial financial decision for many people. Unfortunately, they often come with a lot of strings attached.
When students first start college, they usually go in with little or no idea of the financial realities of a college education. Some of them are shocked when they see how much their tuition costs. Others know the cost and think they’ll have a hard time paying it off.
While many people say that going to school is a good investment, it may not be the best one for everyone.