The truth about student loans
October 27th, 2008 at 04:17 am
http://money.cnn.com/2008/10/23/pf/college/student_loan_fugi...
This article is a prime example of the media's fear mongering.
Idealistically, everyone could learn about anything they want in the interest of higher learning with no penalty.
Realistically, a college education could only be justifiable if accompanied with a commensurate increase in earning power.
While the second half of the article touches on options to get out of student loan debt, the first half of the article paints a bleak picture.
In my opinion, student loan is the best type of debt when used with caution. Here's why.
Assuming you plan wisely, a college education would increase your earning potential tremendously, if you have the right degree from the right school. I have no statistics to back up this assertion, but in my experience as a hiring manager, most of the positions I fill require a degree with the right major, even if the school is so-so. This requirement is non-negotiable, and especially true for government or other bureaucratic jobs.
Student loan is the only debt I know that you have the right to deferment and forebearance under federal law without filing for bankruptcy: http://studentaid.ed.gov/PORTALSWebApp/students/english/diff...
If you have economic difficulty, return to school, take a low-paying job to serve the public, or any number of qualifying events, you may be able to defer or even get partial or full forbearance.
Student loan interest, even if administered by private lenders, also tends to be lower than other types of loans, although this is becoming less true recently as all loans have seen a hike in interest.
Student loan interest is also tax deductible. Consult your tax professional.
Even if you defaulted on your student loans, would this be better or worse than defaulting on another type of loan, say, credit card? What do you think?
Why then would the media portray this relatively benign topic in such light?
Don't fall victim. Educate yourself. Empower yourself with knowledge. Think rationally about your position. Make an informed decision.
This article is a prime example of the media's fear mongering.
Idealistically, everyone could learn about anything they want in the interest of higher learning with no penalty.
Realistically, a college education could only be justifiable if accompanied with a commensurate increase in earning power.
While the second half of the article touches on options to get out of student loan debt, the first half of the article paints a bleak picture.
In my opinion, student loan is the best type of debt when used with caution. Here's why.
Assuming you plan wisely, a college education would increase your earning potential tremendously, if you have the right degree from the right school. I have no statistics to back up this assertion, but in my experience as a hiring manager, most of the positions I fill require a degree with the right major, even if the school is so-so. This requirement is non-negotiable, and especially true for government or other bureaucratic jobs.
Student loan is the only debt I know that you have the right to deferment and forebearance under federal law without filing for bankruptcy: http://studentaid.ed.gov/PORTALSWebApp/students/english/diff...
If you have economic difficulty, return to school, take a low-paying job to serve the public, or any number of qualifying events, you may be able to defer or even get partial or full forbearance.
Student loan interest, even if administered by private lenders, also tends to be lower than other types of loans, although this is becoming less true recently as all loans have seen a hike in interest.
Student loan interest is also tax deductible. Consult your tax professional.
Even if you defaulted on your student loans, would this be better or worse than defaulting on another type of loan, say, credit card? What do you think?
Why then would the media portray this relatively benign topic in such light?
Don't fall victim. Educate yourself. Empower yourself with knowledge. Think rationally about your position. Make an informed decision.