Due to the increasing competition in the job market, young people are constantly under pressure to have the edge over their peers. One of the most obvious ways to become an employer’s first choice is to get higher education. Colleges have been a staple of young people’s education for centuries, and their importance nowadays might be greater than ever.
On the other hand, the price of higher education has made an increasing number of young people across the country unable to afford this step in their life journey. When we combine this with the economic crisis the end of which we have yet to see, what we get is a large number of people who simply have insufficient funds to acquire higher education. As a consequence, some of the students switch to part-time programs, some work and study at the same time and some drop out because of lack of money.
Income has always been an important factor in choosing one’s education, but this fact is now more obvious than ever. According to a study conducted by the University of Michigan, 80% of the richest 1/4 of students enrolled in college by the age of 19. In addition, 68% of them graduated by the age of 25. On the other hand, only 29% of the poorest 1/4 of students enrolled in college by the age of 19 and only 32% of those students graduated by the age of 25. Finally, around 54% of the wealthiest students acquired bachelor’s degrees, but only 9% of students from low-income families managed to get a college diploma.
According to a survey conducted by members of the Ohio State University, 70% of students are stressed due to their financial situation. Apart from the three options that we have already mentioned, there is one additional possibility for students who have difficulties staying at college to pay for their higher education. This possibility is getting a student loan.
What Is a Student Loan?
A student loan is one of the options that you get as a part of your financial aid package, but unlike scholarships and grants, student loans usually must be repaid. They can help you finance your tuition, books or other things related to your college education. Compared to other types of loans, student loan terms are generally more favorable – the interest rates are considerably lower and there is an option to defer your payment while still staying in college.
Depending on the type of lender, a loan can be federal or private. The main difference is that federal loans are granted by the US government, while private loans are made by a bank, credit union, state agency, or even a school.
There are many more differences between a federal and a private loan. To name a few, federal loans have a fixed interest rate which is lower, the rate is sometimes paid by the government, repayment starts after graduation, you will not need a cosigner and finally, you are occasionally allowed to defer or lower your payment.
However, there are some advantages to getting a private loan as well. The competition among different lenders is huge, so they constantly have to improve their terms in order to attract students. Moreover, they can be a good option if you need to refinance your federal loan.
How To Choose A Student Loan?
When you get a student loan, you feel relieved, but not for a long time. Even though this is an instant help that solves your problems at least for a moment, many students fail to understand the loan terms prior to applying for it.
In order to choose the best student loan for your particular situation, it is crucial that you understand all the conditions that it imposes. You should read the terms carefully and take everything into consideration in order to make the best choice.
Important points to consider are:
- The total cost of the loan.
- Monthly payment and the annual percentage rate (APR).
- The loan’s borrower rewards.
- Options to defer student loan.
When you compare all of these points and put them in perspective with your needs and possibilities, it will be easier to choose the best student loan for you.
Our Recommendation: LendingTree Student Loan
Whether you are pursuing an Associate’s degree, Bachelor’s degree, Master’s degree or Ph.D., you should consider this loan as one of your best options. You needn’t worry in case you have bad credit: lenders will not impose any penalties because you will spend your money on education.
When it comes to the loan terms, you can choose from several options ranging from 5 to 20 years. Depending on the lender, fixed rate APR ranges from 3.25% to 6.69%, whereas variable rate APR goes from 2.66% to 6.01%.
By applying for LendingTree student loan, you can save over $14,000 over the course of your loan. Their lenders have been of great help to numerous people in need of money for higher education.
All of this combined with great customer service, convenient online tools to help you in your process and a number of different options make this loan an attractive option for anyone considering a student loan.
To summarize, higher education has been more and more expensive over the past few years. In order to pay for it, one of your safest bets is to get a student loan. There are federal and private loans, both of which have their own advantages. When getting a loan, you should carefully look at all the terms that you find and decide which loan is the best for your exact situation.
If you would like to get a private loan, Elite Personal Finance recommends that you check LendingTree student loan. It offers some amazing features, such as a choice of several lenders, various payment terms, different fixed and variable rates, as well as great customer support and online tools. All of these can be of great help in your process of getting the student loan, but also when the time comes for you to repay it.