Student Loan Myths You Need to Be Aware of
There are plenty of myths and misconceptions about student loans that many young people should be aware of. Learning the truth about these loans can put you in a better financial situation and even help you earn a degree. The more you learn about these things, the easier it will be for you to get an education without any unnecessary frustration.
Cost of College vs. The Price Tag
It can be very intimidating for people who haven’t went to college about people being fifty thousand pounds in debt after finishing school. The truth is that the total cost of college and the amount you have to repay are often very different numbers. The amount that you will be required to pay back depends on how much you make after graduating.
You won’t be required to start making payments on your student loans until you are making a certain amount. If you don’t earn much as a result of going to college, you won’t have to pay very much. This is a great system, because it means that you don’t have to repay the full amount of your loan if you end up making a low amount.
If You Don’t have the Money You Can’t Attend University
Some people also believe that they need to have the cash to go to school to pursue a higher education. You can actually get everything taken care of by the Student Loans Company, but you’ll eventually have to start paying back what you borrow. And while these loans can be very helpful to those who are struggling financially, you still certainly have the option of paying for your tuition directly.
You have to Keep Paying Forever
The fact is that if you haven’t taken care of all your student debt 30 years after you have graduated, all of it will be completely wiped out. While most people do manage to pay off their loans by then, it is still something to consider. If you don’t end up getting very much out of your degree, it is a comforting thought. Most people who just make 25k per year don’t end up repaying their student loans in full but may also end up in debt via different types of loans if they’re struggling to make ends meet and could even end up with a bad credit score.
Debt Collectors will Start Hassling You
Unlike the United States, there are no debt collectors for unpaid student loans in the UK. This means that if you aren’t currently paying towards your student loans, you won’t have to worry about being harassed by constant phone calls or emails. You pay back your loans through the payroll, so this is simply not a thing.
Part-Time Students Can’t get Loans
If you are thinking about going to school part-time, you can in fact get loans that will help with tuition. This also applies to those who are going for post-graduate degrees. There are actually a lot of part-time students in university. This is often a good option for those who are working while going to school. If you want to earn your degree as an older adult, you should consider going part-time in the evenings.
Borrowing for Living Expenses is Difficult
While you can borrow money to cover your everyday living expenses while in college, it can be a little tricky for some people. It will all depend on how much money your parents make. Those who have parents that make a lot of money probably won’t be able to get a loan for these expenses. You should still make a point of applying for these funds though, as they can really help you with getting through college as comfortably as possible.
Your Student Loans Will go on Your Credit File
While some people believe that their student loans will appear on their credit file, the truth is that they do not. This means that they won’t be able to count against you in any way (or for you depending on how you look at it.) This can be comforting to some people who take a while to pay back their loans.
Student Debt Will Keep you from Buying a House
Most people who are saddled with student debt can still get a home, but not always. When the lender runs an affordability check on you, they look to see if you are going to have enough disposable income to make your mortgage payments each month. If you are already struggling to pay back your student loans, it’s probably not a good idea to buy a home.
Final Thoughts
Student loans have helped many people of all ages earn their degrees without paying anything upfront. If you want to go back to school, it is important that you have a full understanding of these myths. Don’t let outright lies about these loans keep you from applying, because they could make your life a whole lot better.