So, what's up with student loans?
by jennifer nichols
[email protected]
Need a Student Loan? At what cost? Depending on the type of student loan you receive, your interest could be radically intense. Though student loans are essential when you “need to pay for college”, they can also generate a ‘hefty payback full of interests’ from major financial lenders and without collateral interests rates vary regardless.
Here’s how: Once you graduate with your first – degree “if” you don’t have Financial Aid to assist you, you begin immediately making payments toward your Student Loan(s) the moment you graduate; the next part of your education is your bachelors but, if left in further debt from owing from your associates (at a two year college), and the more student loans are offered to finish paying for college, often times students become stuck paying back more than what they borrowed called ‘compound interest’. Below is an example.
Simplified Compound Interest Formula
The formula that is used to calculate all federally guaranteed student loans according to debtfreeadventure.com, Matt Jabs at http://www.debtfreeadventure.com/how-student-loan-interest-is-calculated-and-why-it-varies-from-month-to-month/
How Compound Interest Is Used
Here is an example of daily interest calculated out on a student loan of $10,000 at a 6% interest rate:
The above example shows us that a student loan with a balance of $10,000 and an interest rate of 6% would cost $49.28 in interest in a typical 30 day month.
But, what happens if you can’t get a job in that line of work that you went to school for? What do you do? Is there any debt forgiveness? Or, help in retracing your steps? Well, before you begin taking out student loans just because it says ‘low interest’ does not guarantee that remains low. Every interest that you use is money spent that could have been set aside for a rainy day.
According to the headline printed in “The Wall Street Journal”, which read “The Student - Loan Problem Is Even Worse Than Officials Figures Indicate” by Josh Mitchell , http://blogs.wsj.com/economics/2015/04/14/the-student-loan-problem-is-even-worse-than-official-figures-indicate/ proves true even for students who graduate from Bainbridge State College which is a two year college part of the University System of Georgia.
Like many students, many with families end up settling into a job but, typically it is less than they imagined. With hardships, life and the economy much gets in the way including, paying back a loan larger than you borrowed and accruing while you can’t afford to repay over another extended period of time... With even a “Promissory Note” banks alike and other small or large time lenders manage to stay afloat using their investments called “you”. Even with “tax deductions”, yearly deductions don’t give back the entire balance a student managed to pay and if not claimed adequately, that can also cause more money to be deducted.
In which case, it is best to pay back the note while you are still in college, the day you take out the note to keep from further damaging your credit and accruing compound interest amongst late fees is crucial.
So how do you win? Well, be careful who you do business with; use your time wisely; think before you attend college and check out the financial backing carefully. Know that assistance is always there regardless of a legal document despite the institutions affiliates; “if” you are to use a bank or some form of financial institution speak to them first, and let them know that you need help with college funding honestly. Allow them to assist you in mobile banking to track your account daily including your interests of the type of account that covers extra interest to head off hidden fees and your payment.
With a steady job, and dependency you can qualify for programs through local institutions that will help you even if you have to borrow some money, be sure to check out the amount of interest they would charge in the very beginning reading carefully and let them break it down for you ‘in their presence’; only borrow what is essential and take notes. Often home banks are a better choice especially, a credit union due to lower interest rates but, remember that you need to always be in the know of your own finances; banks can even recommend a payback guide by using simple - consolidation.
With the right guiding support banking in education also, becomes not only a business relationship but a smart achievement when you know the ropes in dealing with money and finance... It’s your life. College is an investment, so invest wisely.
Here’s how: Once you graduate with your first – degree “if” you don’t have Financial Aid to assist you, you begin immediately making payments toward your Student Loan(s) the moment you graduate; the next part of your education is your bachelors but, if left in further debt from owing from your associates (at a two year college), and the more student loans are offered to finish paying for college, often times students become stuck paying back more than what they borrowed called ‘compound interest’. Below is an example.
Simplified Compound Interest Formula
The formula that is used to calculate all federally guaranteed student loans according to debtfreeadventure.com, Matt Jabs at http://www.debtfreeadventure.com/how-student-loan-interest-is-calculated-and-why-it-varies-from-month-to-month/
How Compound Interest Is Used
- Daily interest amount = (Current Principal Balance x Interest Rate) ÷ 365.25
- Monthly interest amount = (Daily Interest Amount x number of days in the month)
Here is an example of daily interest calculated out on a student loan of $10,000 at a 6% interest rate:
- Daily interest amount: (10,000 x .06) / 365.25 = $1.6427
- Monthly interest amount: $1.64 x 30 (typical month) = $49.28
The above example shows us that a student loan with a balance of $10,000 and an interest rate of 6% would cost $49.28 in interest in a typical 30 day month.
But, what happens if you can’t get a job in that line of work that you went to school for? What do you do? Is there any debt forgiveness? Or, help in retracing your steps? Well, before you begin taking out student loans just because it says ‘low interest’ does not guarantee that remains low. Every interest that you use is money spent that could have been set aside for a rainy day.
According to the headline printed in “The Wall Street Journal”, which read “The Student - Loan Problem Is Even Worse Than Officials Figures Indicate” by Josh Mitchell , http://blogs.wsj.com/economics/2015/04/14/the-student-loan-problem-is-even-worse-than-official-figures-indicate/ proves true even for students who graduate from Bainbridge State College which is a two year college part of the University System of Georgia.
Like many students, many with families end up settling into a job but, typically it is less than they imagined. With hardships, life and the economy much gets in the way including, paying back a loan larger than you borrowed and accruing while you can’t afford to repay over another extended period of time... With even a “Promissory Note” banks alike and other small or large time lenders manage to stay afloat using their investments called “you”. Even with “tax deductions”, yearly deductions don’t give back the entire balance a student managed to pay and if not claimed adequately, that can also cause more money to be deducted.
In which case, it is best to pay back the note while you are still in college, the day you take out the note to keep from further damaging your credit and accruing compound interest amongst late fees is crucial.
So how do you win? Well, be careful who you do business with; use your time wisely; think before you attend college and check out the financial backing carefully. Know that assistance is always there regardless of a legal document despite the institutions affiliates; “if” you are to use a bank or some form of financial institution speak to them first, and let them know that you need help with college funding honestly. Allow them to assist you in mobile banking to track your account daily including your interests of the type of account that covers extra interest to head off hidden fees and your payment.
With a steady job, and dependency you can qualify for programs through local institutions that will help you even if you have to borrow some money, be sure to check out the amount of interest they would charge in the very beginning reading carefully and let them break it down for you ‘in their presence’; only borrow what is essential and take notes. Often home banks are a better choice especially, a credit union due to lower interest rates but, remember that you need to always be in the know of your own finances; banks can even recommend a payback guide by using simple - consolidation.
With the right guiding support banking in education also, becomes not only a business relationship but a smart achievement when you know the ropes in dealing with money and finance... It’s your life. College is an investment, so invest wisely.