Teaching our Future Today

Once a student finishes high school, he or she is confronted with the choice of further education, either at a vocational school or college, or work. The choice of continued education at a college or university involves many new experiences and responsibilities that do not exist in secondary school. Primarily, the student is now considered to be independent enough to make well-informed decisions about the future of his or her education. One of the most important and serious decisions to be made about higher education is that of student loans. While not always a necessity for every student, about 30% of undergraduates receive student loans at some point in their college careers. Further decisions involving college loans are: type of loans, choosing a lender, amount of loans to borrow, use of loans, and student loan consolidation. Loans are consolidated after a student has finished his or her degree and transitions into the repayment period six months after graduating.

For students who are ineligible to receiving grants, the process of choosing a type of loan commences. Loans are either unsubsidized or subsidized, meaning that interest either does or does not incur during the student's time in college. Unsubsidized loans charge interest from the moment they are withdrawn until they are fully paid off, while subsidized loans do not charge interest until the repayment period begins. College loans based on the student's financial need will more likely be subsidized than unsubsidized. Subsequently, the lender must be chosen. Each college or university's financial aid website will have a list of possible lenders from which to choose. It can be helpful to receive loans from a lender that already has a history with the student; either with a savings account, checking account, or previous loans. However, this is not necessary.

Before each semester begins, students will be informed of their tuition costs for the semester and the full year. Tuition will directly affect the amount needed from student loans. Out-of-state tuition is higher than in-state and graduate tuition is higher than undergraduate tuition. It is also important to take into account living expenses. If the student will be living at home, he or she will not need a larger loan to cover the cost of rent at an on-campus dorm or an off-campus apartment. If parents will be helping with financial support during their student's time in college, the amount of loans required will not be as high as well. Lastly, it is important to take into account whether or not the student will be working during his or her education. Part-time jobs can greatly reduce the financial burden placed upon parents and students throughout higher education.

Student loan consolidation allows multiple types of loans from multiple lenders to be combined to make repayment easier. This option also consolidates the repayment schedule to one payment per month. While this disentangles the repayment schedule, it can also increase the total amount of money owed. The amount of years needed to repay loans varies depending on a slew of factors, and consolidation can increase repayment time; therefore increasing interest accrued. Furthermore, certain lenders may include benefits for loan repayment, which can be disqualified if consolidation is chosen. There is considerable research that should be considered before consolidating any loans. Once this option is accepted it cannot be reversed.

Prior to choosing a certain route of higher education, the opportunity of loans should be taken into account. There are innumerable factors which students and their parents have to seriously consider. The types of loans, different lenders, amount of aid to receive and how to use it, and consolidation should all be acknowledged before beginning the process. Furthering education is one of the greatest opportunities available to people of all ages in today's society, and borrowing money can be the option that makes it a reality.