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| Study now, pay later?: The pros and cons of student loans |
The rate of dropouts among Filipino learners increased even more, when the pandemic hit. Reports say that for the school year 2020 to 2021, at least 2.3 million children failed to enroll and couldn't continue their elementary and secondary studies.
The PSA said that one of the most common reasons why OSYs are not attending school is the high cost of education and financial concerns. While many Filipinos may not be aware of it, there are actually various means to help parents and students fund studies. These include scholarship programs either from private institutions or the government or through student loans that can be availed by college students.
In western countries, student loans are pretty common. However, here in the Philippines, there's a need to raise awareness about how and where people can go to avail it. Parents and students should also first and foremost consider the pros and cons of signing for a student loan. Here are some things to take note of:
Also Read: A Step-by-Step Guide on How to Send Money from PayMaya to Smart Padala
Pros
- Student loans are essentially helpful for college students who want to pursue their studies but don't have other funding options.
The money acquired from a student loan can be used to pay the tuition fee and other miscellaneous fees like books, boarding house rent, and board exams.
- Paying student loans on time can help build your credit standing, which will be helpful later on in your adult life.
- Student loans are frequently offered at fixed and lower interest rates than private loans.
- It's easier to qualify and get approved for a student loan than other loans since firms and organizations offering them don't require credit history.
Cons
- You'll spend your college years in debt.
- Paying your student loans might get in the way of pushing for your other life goals.
- There’s a high chance that you’ll get even deep in debt if you’re unable to pay your student loan on time.
- More often, repayment terms for student loans are less flexible.
- There might be additional fees that you will need to pay on top of the principal and interest amount.
Like how things work in life, getting a student loan has its fair share of advantages and disadvantages. Here’s an added friendly advice: avail yourself only of what you can pay. This is a general rule not just when acquiring loans but also when buying things. Getting a student loan will provide ease when it comes to school finances, but one should also be wise to look ahead on what situation they might be in when the time to repay the student debt comes, and this involves future salary. Don’t borrow more than you need.
It’s also a must to thoroughly check the firm you’re acquiring a student loan from. Don’t make the decision of getting a student loan out of a whim, and make sure that you’ve researched enough about the lending company that you’ll be transacting with. Learn about the background of the firm and scrutinize its loan terms and conditions.
Learn more about the hows and whys of student loans through this story: https://www.debtconsolidation.com/student-loans/. You can also seek a professional’s advice about managing loans, debt, and credit in general here.