Going to university or college is prestigious attainment for many Americans. About 94 million, or almost half of the 25 years and older population, have a college degree. But most of these degree holders and many more who are still about to graduate utilize a student loan to go to college.
As stated earlier, going to college is prestigious, and one of the main reasons for this is the price. On average, this attainment requires about $37,000 every year. That’s more than half the average earnings of an American household. That’s a ridiculous amount of money to sustain someone in university.
Moreover, If you spend about four years in college (the average years needed for a bachelor’s degree), you’ll be paying about $148,000 for it. That’s more than half the price of a home loan given by most mortgage lending companies in the U.S. So it’s something that most people try to achieve but fail because of the price alone.
It’s pretty overwhelming to know the price for college, and there’s a big chance that you didn’t know about the accumulative cost of succeeding years in college. So if you spend about eight years in college to get a specialized degree required to become a doctor or an engineer, then you’ll be spending enough money to buy a house! This is why some Americans don’t opt to get a degree instead.
If it’s part of your plan to get a degree, then there is a way for you to attain it, but much like most things in life, it isn’t free. First, you’ll need a student loan.
What are Student Loans?
A student loan is almost a requirement for every American household to get their adolescents into college. Of course, much like a home, you can’t pay for the college degree by cash, and if you can, there’s a good chance that you don’t need a student loan. But for everyone else, a student loan is what’s going to get you through in college.
A student loan is a loan made explicitly for secondary and tertiary education. Most people think that it’s specifically tailored for college, but many can utilize this loan to pay for their high school fees. Essentially, a student loan covers your requirements for school, such as school fees, textbooks, and more. However, the interest rate for these loans can be quite high, with the average being 5.8%.
So if you borrow a student loan enough to pay for four years in college, you’ll have to pay an extra $7,000 on top of it. That is if your local lender offers a four-year student loan. Some offer a yearly loan which means you’ll have an accumulating 5% interest rate per borrow.
It’s quite a scary thought to get a loan with such a high-interest rate. The price for student fees is already high enough. This is why about 46 million Americans have student debts, with some of them unable to pay for them. So If you’re planning to get a student loan, it’s crucial that you only borrow how much you need.
Do You Need It?
Borrowing what you only need is essential for you to decrease your starting student loan. So many financial experts suggest never using student loans for anything else aside from college. Unlike other loans, the interest rate is too high for you to use for investments.
Ultimately, it’s better to ask yourself whether you need a student loan or not. If you’re halfway through your course, but decide that you’d want to start a business instead, then you better quit right there and then, instead of borrowing more money from lenders. Moreover, it might be better to get a scholarship instead.
Scholarships can drastically reduce the number of your school fees. Some scholarships can even pay your entire college tuition for a year. However, scholarships require you to perform well, or in some cases, they require you to be the best in school.
There are also some college students who apply for grants. Unlike scholarships, you don’t need to perform well in school to get a grant. But it’s required for you to have a financial need. This means that an NGO can give it to you if your family income shows that you’re well below the necessary income level for college.
Student loans are your entrance fee for college and an expensive one at that. It’s crucial that you ask yourself whether you have the will and determination to finish college because you don’t want to get a student loan and not finish college. That’s a wasted investment that you might have to pay for the rest of your life.