Busting Common Student Loan Myths

Money makes the world go round. This adage applies to modern education. School/college education often requires external funding. It commonly takes the form of student loans. Taking student loans has become more accessible. However, repaying them is taxing for many students. Before applying for a loan, every student should clear their doubts about this form of financing. In this blog, we bust the common myths around student loans.

Myth #1: Students Need Not Worry About Paying Back Loans

Often students are lax about loan repayment once they graduate. Usually, students enjoy six months of grace after graduation for loan repayment. Ideally, students should shell out a small amount of money every month to ease the burden of loan repayment. Another repayment strategy is to take up a job during the study period. It reduces the process of loan repayment. Although it is advisable not to stress out, never take the issue of loan repayment for granted.

Myth #2: Master’s Fee Repayment Requires A Large Amount Of Money

Master’s candidates need to pay their entire fees for the course. Government policies are tilted in favour of these students. They receive enough student loans to take care of much of their expenses. Usually, the education fee can be covered by such loans. However, for other expenses, alternative ways are needed. One alternative is to seek education in less expensive countries. Some students choose to take a part-time job for extra expenses. In short, master’s fee repayment need not require a large sum of money.

Myth #3: University Education Is Only For The Wealthy

There was a time when this belief was popular. Today, however, the gates to education are open to all. Any eligible candidate can complete a university education through tuition and maintenance loans. For students in the lower strata, better terms are provided for maintenance loans.  In addition, scholarships and financial grants are available to students who can’t finance a university education from their pocket. Taking part-time jobs is another option. In a nutshell, university education is not for the wealthy alone.

Myth #4: Interest Rates On Loans Keep Fluctuating

The interest rate chosen at the time of agreement continues till the loan is repaid. The agencies financing the loan do not change the interest loan every month or every quarter. Even private loan agencies don’t do this. The rule is that students must pay only the agreed-upon interest rate when signing the contract.

Myth #5: Borrow As Much Money As Possible

In reality, students should borrow only as much as they need to finance their education. If you have the opportunity to get more loan amount than you need, don’t do it. Lower costs by trying for scholarships and cheaper education. Estimate the future by considering the job opportunities and the salary you will get in the future and accordingly take the loan. Don’t spend loans on luxury. If there is any unused loan amount, return it promptly.

Myth #6: Repaying Student Loans Is Next To Impossible

Sometimes repaying student loans gets very stressful. At the inception of a student’s career, they may find it challenging to repay their loans. Some students choose to work overtime or do a side hustle to repay their loans. In addition, taking up jobs during education is a top strategy students use to collect debt repayment money.

Myth #7: Accept Advice From Loan Services Blindly

The advisors at the loan service are often full of suggestions. Students must remember to take the tips that fit right. Manage finances using common sense and intelligence. Tread with caution. A student is the best judge of their situation. Hence, they must never accept advice from loan services without thought.

Myth #8: Repaying Student Debt Takes The Whole Life

A common myth. Proper planning allows student loans to be paid off relatively easily and soon. Students do not have to spend their lives repaying their student debt. 

Myth #9: Repayment Begins Immediately After Graduation

Usually, loan repayment begins after a grace period that starts after graduation. You have the opportunity to settle down in a new job before you start payments. 

Conclusion

Hopefully, this myth buster from 21K School deflated several myths on the subject. These nine myths about student debt often affect students’ decisions to pursue higher education. Before taking a student loan, students must remember to know all terms and conditions. Plan in advance to repay a student debt. Students should stay well informed and prepared as they head to higher education. Careful planning means half the battle is won.