Student Loans

Students enrolled in post-secondary institutions face high tuition and school fees, to say nothing of living expenses and the cost of supplies. There are many ways to cover the costs of your education, and some students manage to do so without ever borrowing any money, graduating debt-free. But, while there are bursaries, grants and scholarships available, and it is possible to save money over the summer break and to continue to earn with part time employment during the school year, most students will end up taking out a loan at some point in order to finance their education.

If you need to borrow money, it is wise to plan carefully and do your research. You will be graduating with a debt load, and it may not be possible to find a high paying job right after graduation. Some students find themselves so burdened by student debt that they are unable to get funding for major expenses like a car or a house for years after graduation. Many get caught up in the ease of having extra money and so borrow more than they need to cover their expenses, ignoring the reality of needing to repay all the money shortly after graduation.

What many students do not realize is that loans aren’t only offered through the government, but also through all banks and financial institutions. It makes sense to research all your options before deciding what loan to get, as there are advantages and disadvantages to each type of loan.

Government loans typically do not charge any interest until you graduate, nor do they expect payment to begin until six months later. In order to get a government loan you must qualify based upon financial need, and your family’s finances are also considered in making this decision. For this reason, you may not qualify, even if your family is unable to assist you in your education costs.

You may find it easier to get a bank loan, but interest will accrue immediately, and you will not have the grace period you get from government loans. Another option is to get a line of credit, so that you only borrow the amount you need at a time (rather than receiving a lump sum of money as a loan), and you only need to consider the interest on the amount you have borrowed.

By: Jon Ginsburg

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