Student loans are a much discussed subject, so it is no surprise that there are some common misconceptions about student loans. Below, you will find the main misconceptions surrounding student loans, so be sure to read on if you want to obtain a student loan, or currently have one.
I Must Obtain a Student Loan, Because My Family Is Too Poor!
Some students believe that their only option is student loan when their family cannot afford school fees, and when they don’t receive any financial aid. This is not necessarily true, because there are many ways for students to prepare for further studies without having to resort to student loans immediately.
Students can avoid high student loans by applying to so-called safety schools. These types of schools offer merit aid and merit scholarships, so the student in question can still attend the school without obtaining high student loans!
If I Have a Higher Student Loan Debt Than My Fellow Students, I’m In Even Bigger Trouble!
There is a lot of talk surrounding student loans, which often includes stories about students drowning in debt after finishing their studies. However, the founder of Credible Stephen Dash stated that these students are not the ones that are worse off, because students who have a lower debt of $5000 or less and don’t have a degree at the end of it are in more trouble. These students do not have the skills to increase their earnings, so they are the ones who often experience the biggest problems.
Getting Rid Of Student Debt Is Always a Priority
Having debt can be stressful, so it is only natural that you want to pay it off as soon as possible. However, it is essential to look at your student debt in a smart manner. It is important to focus on high interest debt first, which many students encounter shortly after they graduate. Then, only spend a minimum on the remainder of your debit, so you can eliminate the debt with the highest interest rate first.
I Can’t Pay Off My Student Loan Until I Graduate
This is not true, because you can start paying off your student loans while you are still studying. So, if you have a job on campus or outside campus that leaves you with a little extra at the end of the year, you can use that little extra to start paying off your student debt before you graduate.
Paying your debt off a little earlier can have an impact on how much you have to pay back overall, since interest accrues on your student loans over time. By paying off this debt while you are studying, the interest won’t run up that high.
Lowering Monthly Repayments Could Help My Financial Situation
Even though repayments can take a serious chunk out of your budget, so many students are tempted to reduce their monthly payments. While lowering payments is possible, it does extend the repayment time and how long this loan will affect your life. So, before you consider loan consolidation to lower your payments, be sure to look at your long-term goals too.