A student loan, well any loan, is future income brought forward. While there are consequences to debt, the key is being educated to the realities of repayment in the long term (i.e. opportunity and financial costs) and being rigorously honest in the intermediate term about the value of the college education your debt is purchasing.
The following are a few facts that will help educate students and families before taking any student loans:
FACT 1: Most student loans are made by the Federal Government.
WHAT THIS MEANS FOR BORROWERS: Fixed interest rates for the life of the loan and repayment plan choices. Students can choose to modify their repayment plans at any time.
FACT 2: Just because student loans are offered to students in their financial aid award letters, doesn’t mean a student HAS TO take them.
WHAT THIS MEANS FOR BORROWERS: Students approve each item individually on their financial aid award letters and decide on a yearly basis to take or not the student loans. Students (and their families) can decide how to most effectively allocated savings and/or get a job to pay for the amounts offers in the loans.
FACT 3: Federal Student Loans can be forgiven, with responsible repayment and commitment to particular careers.
WHAT THIS MEANS FOR BORROWERS: Add career choices to any considerations of student loans. 10 years of public service and 120 on-time payments can qualify students for loan forgiveness of any remaining balance.
Jill Yoshikawa, Ed M, is a University of California and Harvard trained educator and Partner at Creative Marbles Consultancy. You can contact Jill at firstname.lastname@example.org or, read her short biography.