Things to Know Before Taking Out Student Loans

Posted on Sunday 07 October 2018

As the number of student loan debts surges with each passing day, more and more people are beginning to question whether or not taking out a loan just to attend college is worth it. In addition, the economy is changing; more young people are now seeking employment within the gig economy as freelancers and independent contractors.

Others, however, are still deciding to take out student loans for the sake of pursuing higher education and securing a white-collar job.

Student Loans are Not Free Money

Many young people don't understand the nature of student loans. First, borrowers have to pay back the money they owe the government. Typically, recipients make monthly payments, although the specific amount depends on various factors. One such factor is how much has been borrowed.

Many young adults make the mistake of borrowing more than they need. When taking out loans, you should know that you may not pay them back as quickly as you imagine. Months, years, or even decades can pass by before you become debt-free. This can be pretty daunting to a young, ambitious 22-year-old who wants to enter the workforce and make a name for himself. Also, huge debts can ruin opportunities that would otherwise be available if you do not owe thousands of dollars to the government.

There are Other Ways to Pay for College

Believe it or not, taking out student loans is not the only way for you to fund your college degree. You can cover the cost of attending a university through academic scholarships, military service, university employment, and part-time employment. Students who maintain good grades in high school are likely to access these academic scholarships.

Admittedly, these alternatives usually come with specific stipulations. However, these stipulations may arguably be better than the crippling debt accompanying student loans.

College is Not for Everyone

While many people attend college and live comfortable middle-class lives, college is not for everyone. Unfortunately, one of the gravest mistakes in today's education system is failing to educate students about all the options available after high school.

Generally, young people are automatically brainwashed into believing that attending university is their only choice. Another common malpractice is telling students that they will be statistically poorer than individuals who choose to go to college.

Various options exist post-high school, such as freelancing, trade school, independent contract work, and entrepreneurship. Educators who fail to inform students of these paths are doing students a disservice.

Final Thoughts

Every young person has to decide whether or not to borrow student loans. This may or may not work out well. It is best to be equipped with the needed information to reach this decision. This will keep you aware of your alternatives and help you examine potential consequences.

Also, it is crucial to set your priorities right when taking a student loan. You should never take out a student loan to buy a car or other luxuries. These actions can damage your prospects and may even lead to legal action. There have been multiple reported cases of people applying for money just so they could hoard it. Debt collectors often trail behind people like this for a long time.

What's important is that you are aware of your options, and you take time to think about what's best for your career trajectory and financial future.

Authored by Gabrielle Renee Seunagal