The financial burden in college can sometimes be too much for students and their families to shoulder. These student loans are pretty much like the usual loans but with lesser interest and this one is specifically used for college purposes. The repayment plan in student loans is much more relaxed too for the students. There are two classifications of student loans, with one being Federal loans and the other being private student loans. Student loans are meant to help out students who can not pay for themselves, so the student’s background is taken into consideration before a loan is granted. In this article we shall see Will A Student Loan Cover Living Expenses?
Yes, normally student loans cover the living expenses of the students, even though it is expected that the living standard of the student should be mild and not extravagant. A student’s student loan is majorly determined by his college’s Cost Of Attendance (COA), this COA differs from school to school. It is cumulative tuition, books, transportation cost, supplies, living expenses, and many more. So in summary, the student’s college has a major say on how much the student receives in student loans.
What Constitutes Living Expenses?
There have been reasonable arguments as to what constitutes living expenses, and what is not living expenses. An instance can be pictured through illustration, a student living in the hostels can not purchase a car and make a good case of it being with the “living expenses” claim. It is believed that common knowledge will easily point out what constitutes “living expenses”.
The student loan is given to the student to cater for anything college-related and all problems that come along with college life. In school, there are a lot of expenses that need financial aid for them to be sorted out. Certifications for the program the student is on textbooks, notebooks, and even diary pads. Extravagant lifestyle is not budgeted into these student loans, and it is very important to sound this very loudly for the students.
Benefits And Dangers Of Students Loans
Student loans can be alluded to by the popular saying “There are two sides to every coin”, while the concept has been beneficial to a great extent for students, it has also wrecked a lot of students in that same process.
Benefits:
- Low-interest rate
- It covers more than tuition (most times)
- Not too difficult to apply for
- Allows the student to concentrate on his/her studies
- Repayment time is well stretched out
Dangers:
- Puts one in debt at an early age
- Puts your dream on hold
- Student loans do not go away until one has repaid it
- A student Loan can render you ineligible for a job.
- It can change your life plans completely.
Classification Of Student Loans In The U.S
There are just two types of students loans in the U.S. namely;
- Federal Student Loans
- Private Student Loans
The terms and conditions involved in a federal student loan are provided and spelled out by law, and repayment plan and interest rates are all covered by provisions of the law. However, this is not the case with private student loans. In private student loans, the terms of the transaction between the student and the loan institution which could be the school, banks, etc are determined by both parties. The agreement between both parties takes the form of the usual contract in the business world, and can only become binding when there is consensus ad idem.
How Can One Obtain A Student Loan?
As mentioned above, there are two classifications of student loans, each has it specific procedure for securing the loan. A student seeking to obtain a federal student loan will have to fill out the “Free Application For Federal Student Aid” it is this application that can help determine the type of aid the government will grant the student. This FAFSA application must be double-checked by the student to avoid any sort of miscommunication. For a student to be successful in this quest, he must at the time of filing the FAFSA, already decide on which college to attend.
Obtaining a private loan is much simpler, it is obtained exactly like how normal loans are. The student just has to pick which lender he/she prefers to take out a loan from.
Conclusion
The line between extravagant spending and normal living can sometimes be blurry but when more light is shone on it, the differences could be spotted. Students in some cases lose it and still use their student loans to sort out all kinds of financial issues in their lives. In their defense, these issues are still intertwined with their academic life. It is always advised that a student does not play the long game of having to do a lot of explaining as to how he spent his student loan. Simply use your student loan and sort out all college directly related expenses. A student has to explore all other nonpayment options for funding college expenses like scholarships and grants, before resorting to student loans which adds a lot of pressure on the student.
Frequently Asked Questions
- What will happen if one can not pay up their student loan?
Nothing good comes out of your inability to pay up your student loans. Firstly, your credit rating will suffer very badly. The loan will be on your credit record and could cost you a lot of opportunities with prospective clients and employers. It is easy for people to not trust someone with a bad credit record, as the person comes off as a negligent person or a carefree person. Inability to pay up your student loan can also attract high-interest rates on the loan you already have, in the end, this does not look good for the student.
- Do all colleges in the U.S allow Student Loans?
Yes, the student loan system is adopted to help out students who do not have the means of sponsoring themselves through college but have the passion to finish college. The student loan system is a national intervention, to promote education in the college sector. Students now have the means to secure that college degree even though they are not buoyant themselves.
- Can one seek a student loan midway into college?
Yes, this is a possibility. Sometimes a lot of circumstances influence a student’s financial plans in college. The student loan system will not forsake a student just because he/she is already halfway into college. This alone will be a major dent in the main reason the student loan system is here in the first place. A student who had a change of plans and is now seeking a student loan midway into college can still be able to obtain a student loan.
