This article provides three important things students must keep in mind while dealing with the idea of taking a student loan.
This is to ensure that you get the right information and strategies to minimize the financial risks that taking a student loan involves.
Therefore, this article will be of help to you if:
AfterschoolAfrica shows you three things you must know before you take a student loan.
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It is not advisable to turn to take loans as your first and only option when it comes to paying for a college education, This is because you must first consider other options like:
The two major types of loans that we have are federal loans and private loans. Federal loans are the loans you get when you submit the Free Application for Federal Student Aid or FAFSA. This kind of loan is the better choice because you do not need a credit history to apply for it, and their income-driven repayment program is of huge benefit to you.
Furthermore, you get subsidies on federal loans if you demonstrate financial need, and they do not accrue interest while you are in school, unlike private loans.
Therefore, due to the repayment programs and the subsidized rates attached to federal loans, it should be the first option to consider before taking a student loan.
Repayment of student loans begins six months after graduation from the university, but you can opt to start repaying your loans while in school. Generally, students are placed under a standard 10-year repayment plan, except if you request the income-driven repayment option. In that case, note that the income-driven repayment format allows for better management for students who are just starting their careers and do not earn enough yet.
Meanwhile, for private loans, you can apply for the option to fund directly with private lenders. But lenders will first review your financial situation and your credit history before they can decide whether to approve this option or not. Furthermore, in cases where there is extensive credit, the lender will require a cosigner before approval can be made. Additionally, private lenders may also offer a period of grace when it’s time to repay your student loans.
Lastly, for federal loans, the interest rates are set by Congress each year, while private lenders base their interest rates on your creditworthiness.
We have four alternatives to student loans which we will explain. Note that picking the best option for you out of these alternatives will be beneficial for you in the long run.
A grant is an amount of money that is given to you that you never have to pay back. The USA has several institutions that offer grants, such as the federal and state governments, universities, and non-profit organizations.
You can check the articles here for the best grant option that may be available to you.
AUSTRIAN GOVERNMENT OEAD ERNST MACH FOLLOW-UP GRANTS FOR DEVELOPING COUNTRIES
MOZILLA’S AFRICA INNOVATION MRADI RESEARCH GRANTS FOR AI RESEARCHERS
GETTY SCHOLAR GRANTS FOR INTERNATIONAL RESEARCHERS (FULLY FUNDED TO LOS ANGELES, USA)
BLACK FOUNDER STARTUP GRANT FOR BLACK ENTREPRENEURS IN AMERICA
You can also search for grant opportunities online.
A scholarship refers to funds offered to you for your education that, just like a grant, you do not have to pay back. There are two types of scholarships and they are:
Additionally, other forms of scholarship are based on gender, ethnicity, cultural heritage, and others. Other scholarships are based on other characteristics, such as gender, ethnicity, heritage, or others.
Therefore, you should be on the lookout for scholarship opportunities. In addition, you should apply for more than one scholarship; this is likely to increase your chances of getting one or more.
Here are some scholarship opportunities you can apply for:
A work and study program will allow you to work part-time as a part of your degree program at the university. This program gives you the necessary work experience and the ability to earn while you learn.
These work and study programs involve on-campus jobs like working at the cafeteria, school gym, library, and garden. While in some cases it could be in relation to your area of study like education students working as an assistant to lecturers.
Therefore you should contact your university’s financial aid office for work and study programs that can aid you financially and be sure to understand the terms and conditions before committing to any of them.
A part-time job offers the chance to earn better than a work and study program and they are a great way to offset your student loans. But you must make sure to create a balance so as not to sacrifice your grades for pay.
Therefore one way to go about this is to make use of your summer when you have less academic work to worry about to do some part-time jobs. However, if you are on a study visa, you must be aware of the limitations that allow you to work a certain number of hours.
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This post was last modified on February 5, 2024 11:17 am