Should Student Loan Debt Worry me?

If you are considering going to college, then it may be that you will need to get a student loan in order to do so. This could be something that may or may not worry you. It is worth thinking hard before getting any type of loan as there could be consequences for you in later life.

Advantages of a student loan

If you cannot afford to go to college without borrowing money, then getting a student loan will be the only option that you have if you wish to attend. Obviously if you can avoid borrowing money and still get your qualification then this will be the perfect situation but most people cannot afford to do this. However, there are still mana advantages of going to college which can be offset against the disadvantages of getting a student loan.

Assuming that you get your qualifications then the course that you do should enable you to get a better paid job. This additional income will add up and could make it well worthwhile going to college and paying for that loan. Obviously, you will need to pick your course carefully though. You will need it to be a course that will enable you to get a better job that will pay more and make it worthwhile paying or the course. You can probably do some calculations to work it out. You will need to find out how much the loan will cost you to start with. Then you need to find out how much extra you will be paid. Then you will be able to decide whether you think that the loan is worthwhile or not.

It can be tricky to predict how much the loan will cost due to the possibility of interest rate roses as well as not knowing whether salaries will change and whether you will be in work all of the time. However, you should still be able to make a good estimation as salaries are likely to go up if interest rates also rise. The rates on the student loan may be fixed anyway and so they may not change.

Disadvantages of a student loan

Of course, you will have to repay a student loan and this could take a long time. The amount that you borrow will be a big factor, but the loan will normally need to be repaid in full. This will mean that you will have less money available to pay for other things. It is worth finding out how much the repayments will be so that you can decide whether it will be an affordable amount. Obviously, it is very difficult to predict how much you might be paying out once you graduate. You are likely to be renting an apartment and will need to pay all of costs associated with that as well as covering your food bill and everything else. Then you will need to consider the costs of transport to work, perhaps running a car and then any additional costs that you may have as well, perhaps as a result of getting a partner to live with, having children and needing to move to a bigger apartment. It can be difficult to calculate this, but asking parents could be a good help as they will have gone through this and will know what you might need to expect.

Some people also find that having a loan hanging over them can make them feel stressed. They feel like they have a big burden and responsibility and that they always have to be thinking about making sure that they can manage the repayments. This is something which can be difficult to find a solution to. Knowing how much the repayments will be and that you will have enough income to repay them can be helpful though. If you can be confident that you will be able to afford them, then this will help.

Deciding whether to get one

It is worth taking some time to think about whether you feel that getting a student loan is right for you. Consider how you see your future and what course you would like to do. It can be worth thinking about where your career may lead. It is also to good to think about whether there are alternatives to a loan. It might be possible, for example, to get a scholarship or grant to pay towards the course. It may be that you could work and save up and pay that way. It is good to just look at what is available for you and what options there are that could help. You might be surprised at what financial help there is available or that you could apply for. Even if you cannot get any help, it is worth carefully considering whether the benefits of the course will outweigh the disadvantages of a loan.

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