The Federal Government has seen through the problems of its people regarding education. Since college education is too high for some, most teenagers opt to find a job rather than pursue college. Many tried their best working part-time to sustain college education, but they realized it's not that easy.
But some students who are determined to get a college diploma grab the opportunity of student loan programs. Due to the many creditors and debtors in these schemes, issues have become so many. These issues have discouraged many students in the pursuit of their college dream.
Some Common Misconceptions About Student Loans
1. It’s Always Cheaper To Have Federal Student Loans
It’s not true that federal student loans are always cheaper than the student loans extended by private lenders. It may be true, however,to students with very high financial needs because they’re eligible for subsidized federal loans. Their loans are to be sponsored by the government either partially or the whole amount.
But students with jobs or whose financial capacity can sustain periodic repayments may apply and avail of unsubsidized government loans. Because regardless of their financial situation, all students can apply for a federal loan. It’s just a fact that some student loans are cheaper and better than others.
But it’s not absolute that the government program for student financing is always better than private lending firms.
2. It’s Not Possible To Save And Pay Off Student Loan Simultaneously
Saving while paying off your loan is possible. It’s a matter of being determined to save. You can calculate your student loans as a basis. The totals may tell you to either get refinancing, or just stretch your finances a little bit so you’ll have something left for your savings.
These figures will also help you establish a workable debt payments and savings at the same time. Even though a budget lets you look at your money monthly, it’s better to consider the future of your finances. It doesn’t have to be an impressive monthly savings. You can start off with a little over a dollar then increase it as you adapt to saving every pay period.
Making a list of your expenses and ensuring that only the necessities take your cash out is one way of saving your way for more savings. Managing your finances will not necessarily limit even your social life.
There are many ways to budget a night out or any activity. The courage to start saving and the determination to continue with it are the main factors that can effectively make you save for a rainy day. It’s always possible to make student loan repayments and save, at the same time.
3. It’s Always Better If The Loan’s Interest Rate Is Lower
Most loans with minimal interest rates have to be paid in shorter terms. You might be required to pay your student loan while you’re still studying and don’t have much means to support such a burden. It will also affect your principal payments, which will have higher amounts if the period to pay is shorter.
It’s not always true that it’s better if you have a lower interest rate on your student loan. Check your repayment schedule if it is going to work with your situation and help you with your studies.
4. It’s Okay To Wait Until Financially Able To Pay
It’s a misconception if you think you can wait until you’re financially stable before you continue paying. It may get you into a difficult situation. Non-repayment means your lender will be after you. Your credit score will also be affected. The lower your credit score, the less chance you have to qualify for a loan in the future.
Paying on time is always advisable. But if you’re really hard up, there are many federal programs that can help you apply for a more manageable repayment schedule and amount. Some agencies may even grant you loan forbearance, depending on your financial or economic situation.
So buckle up, abstain from some spending and concentrate on your necessities. It's not good to wait until you're financially stable before you start paying off your student loan.