speaking you cannot ignore the fact that the cost of a college
loan education has soared through the roof. No one can deny
the fact threatens to make a higher education for pursuing a
dream career an impossible task. Because of this simple reason,
students and their parents are compelled to opt for education
If experts are to be believed student loans have become a part
of life. Theoretically speaking this is no wonder, considering
the facts and figures that clarify the earning potential of
college graduates. In addition there has been a series of nationwide
surveys on student loans and their implications. Believe it
or not the fact is that each loan
education graduate ended up earning $1 million (according
to the United States Census Bureau) more throughout his/her
career than a high school graduate.
Point to be noted in this regard is that many people are confused
as to whether they will be ever able to repay their loan
education completely, given the high rates of interest
on various student loans. However, fact remained that the advantages
of taking out a student loan may far outweigh the costs:
1. First and foremost
college educated people advance higher and faster in their careers.
2. On the other side
of the coin the average earnings of the college educated are
$2.1 million and this figure is $1.2 million for high school
graduates. Still, it is worthwhile remembering that considering
one takes out a Federal Perkins Loan (current interest rate
of 5% per year), and borrows the maximum amount permissible,
which is $40,000, the total repayment you would make over a
10-year term would be somewhere close to $51,000.
3. In simple terms contrast
this against average salaries of college graduates. It is worth
pointing that a nursing job would get you $38,788; Chemical
4. There is no denying
that salaries are increasing steadily at a healthy pace from
11.2% for elementary school teachers to 5.3% for civil engineers
and 2.1% for chemical engineers.
The question now arises:
How does it all add up It is worth mentioning in this regard
that considering again the Federal Perkins Loan, which allows
you to pay back the entire amount with interest in 10 years,
it will take away 1 2 years of your starting salary but spread
over a 10-year term. More often than not the monthly payment
would not be over $430 for the whole term, while your salary
keeps going up.
The question now arises:
How Can You Plan Your College Education Loan
Well, it is pivotal that you answer the question how can you
plan for the loan education
In an ideal scenario before you decide on a loan amount, you
need to assess your different options:
1. Grants and Scholarships: Point to be noted
in this regard is that grants and scholarships are referred
to as free money, as they are not expected to be repaid. Furthermore
it is worthwhile remembering that they fund education completely
depending on certain criteria. In that scenario, you would hardly
opt for loan if you have a choice.
2. Work-Study Programs: On- or-off-campus there
is no hiding the fact that federal programs let students work
part-time to offset their expenses. As a matter of fact depending
on your savings, your loan amount can be reduced up to 50%.
3. Tuition Payment Plans: If experts are to
be believed spreading out of tuition and fees eases the burden
of a one-time payment for families who have discretionary income.
4. Home Equity Loans: More often than not this
can possibly eliminate the necessity to take out a student loan.
5. Funding through Assets: In addition through
the sale of stocks and/or 401 (k) plans, families cab fund their
childrens education in order that they reduce the student loan
According to experts
with planned self-financing, you can strengthen your position
to fund your higher education and reduce your student loan debt.
On the other hand by utilizing student loans to either partly
or completely fund your education, you will ensure yourself
a lifetime of income long after the loan is repaid.
Theoretically speaking loan education
are meant for people whose income is not high enough to attend
school. As a matter of fact with high education costs high and
the availability of education loans, many people are opting
for these loans.
In an ideal scenario educational loans are of many kinds: according
to the sponsor (federal or private), according to the beneficiary
(undergraduate, continuing education, insurance loans, parent
loans, payment loans), according to the course: law school,
medical school, dental school, MBA, general graduate, or post
graduate. Besides all this, there are also career loans for
people who are pursuing graduate or postgraduate education on
a part to full-time basis.
At the present juncture,
getting an educational loan has become very easy. Believe it
or not there are online applications as well as telephone applications.
Whats more the requirements are often simple-- social security
number, date of birth, employers name, phone number, years
of employment, gross annual income (adjusted gross income for
self employed individuals) and monthly rent or mortgage payment.
Furthermore it is worthwhile remembering that there are many
loan options to choose from. In addition sundry are the repayment
options. More often than not they include standard repayment,
graduate repayment, income-sensitive repayment, consolidation,
There is no denying that
loans from the government have lower interest rates. In simple
terms these include the popular Stafford loans. According to
experts Stafford loans are of two kinds: subsidized and unsubsidized.
Point to be noted in this regard is that these loans are insured
by the government. As a matter of fact the government pays the
interest for subsidized loans while the recipient is in school
at least half-time. In addition these are for people who have
low financial status. It is worthwhile remembering that the
rate of interest for the federal Stafford loan is 4.70% during
in-school period and 5.30% during the repayment period. Whats
more there is also the parent loan for undergraduate students
(PLUS) that allows parents to borrow any amount up to the cost
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