By Marie Nelson
As per a recent study by the New York Fed (Brad Plumer), young people are not buying either houses or cars- the two most significant components driving a nation’s economy. It has been found that the number of 30 year olds with student loans, who have secured mortgage loans as well, has come down since recession. Additionally it has also been discovered that the number of 25 year old people already having student loans, but also opting for car loans, had declined since crash. Now, it can be easily assumed that one of the crucial reasons why these people are not purchasing cars and houses is because they are already overburdened with the student loans and are therefore not in a position to buy houses or cars. However, a string of recent statistics will prove that this assumption is not entirely correct. Let us explore why.
To begin with, it is absolutely not correct to think that college students in their 20s have excessive debt burdens today. In fact, after the year 2008 there has been a marked fall in the number of students taking loans. In fact borrowers in general (with or without the student debts) have utilized all these years in repaying their debts and bringing down their expenses.
In fact, as per some experts, obtaining loans for admissions in colleges is one of the best financial decisions that a youth can make, considering the fact that college graduates are paid much more than their non-grad counterparts. The college premium or the bonus received by the youth for attending college has increased substantially over a period of time (has become almost triple over the past thirty years). Therefore it can be said they act to boost a nation’s economy as they help students to earn more.
As for the undergraduates, it is not possible for them to be saddled with huge debts worth $ 1, 20,000 as the best the Stafford (student loans) loan programs have due caps worth $57,500 dollars for the older ones and $31,000 for the ones who are dependents. It is only through private borrowings that they are so hugely overburdened with debts. Private borrowings have remained a problem; where lenders willingly provide too much money to the hpw borrowers, only with a view to ensure that they are never able to come out of the debt trap.
Thus it would be unwise not to opt for student loans and skip college thinking that you will not be able to buy a home or a car for yourself owing to the debt burden. There will be a number of companies providing you with low rate student loans. Go through their websites thoroughly to know more about them. Please exercise due discretion while using this type of financing. Acquire an idea about the kind of money that you will be able to earn from your prospective job. For instance, it will be better to opt for this type of financing, provided you are aiming to become an engineer in future.
Get a loan online and please consult at least a few websites of therelevant companies. Go through the features and rates offered by these lenders and compare the rates thoroughly before settling for a lender. It would also be advisable for you to step up your financial literacy a bit. Several companies offer different types of student loans. Thus go through the features of each one of them to decide which one is the best for you. Use the student loan calculators as well.
Here are a few tips on dealing with this kind of financing in a better manner
Try to get in to the habit of saving from now
As already mentioned, have a clear idea about the kind of money you will be able to earn once you step out of college- that will go a long way in determining whether you should opt for this kind of financing at all or not. For instance, if you are opting for a career which does not promise a great earning prospect in the beginning then it would be better to shy away from this kind of financing. Thus make your choices wisely after giving them much thought.
[author] [author_image timthumb=’on’]https://fbcdn-sphotos-e-a.akamaihd.net/hphotos-ak-prn1/p480x480/943132_629521280409684_1499453320_n.jpg[/author_image] [author_info]Marie Nelson is a widely acclaimed author dealing with the much complicated issues of investment banking, foreign trade and various types of financing. She has been writing regularly for well known journals and web portals.[/author_info] [/author]