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Is a student loan that bad?

chrysgold
New Member

Is a student loan that bad?

I'm in my second year of community college, compared to universities, tuition seems fairly cheap to me. It's 2500-3000 per term.

I have enough left in my college fund that my parents set up for 2 terms out of the 4 terms total that are left. 

My parents don't share much when it comes to financials, so I don't want to share on a public forum. However, my mother frequently complains about my dads spending and bill amounts. They should be pretty well off from what I could tell.

My father says after I use up my college fund I should leave college and work to save up the 5000(approx) for the last two terms. 

However, I am recently divorced single mother of 3 young children. Not possible to get a job within reasonable distance (as far as gas money goes) that can afford all me and my kids need and save up 5000 before my credits expire. 

 

Side note: I'm enrolled in a program that has 22% job growth outlook and easily within 2yrs in the field with good experience, could be making upwards of 65k which is much better than my usual 15k

 

I have a long history of struggle with college, working to get my financial aid back. My dad is extremely against any sort of loan. Reminds me each term "NO LOANS"

 

Big question: Is getting a student loan so bad? I have other resources maxed out, (other than grants/scholarships due to current, temporarily inability to get financial aid) and I can afford books and supplies. 

Message 1 of 5
4 REPLIES 4
rostrow416
Frequent Contributor

Re: Is a student loan that bad?

If the options are either take out a student loan and finish school or drop out and save to finish later, you should just take the loan and finish.  

 

As long as your costs are not going to get out of control (and from the cost of your tuition, it shouldn't), you should be able to come up with a repayment plan the same way you would come up with a plan to save the money to pay for school if you were to drop out now and go that route.

 

Make sure you get a Federal student loan, they are a lot more reasonable than a private one.

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Message 2 of 5
Slabenstein
Valued Contributor

Re: Is a student loan that bad?

I would say that, like many credit products, student loans are neither good nor bad in themselves and can be either depending on what debt one takes on and how one manages it.  Until about two years ago, my spouse's student loan payments were far in excess of what they could afford monthly, and that debt was a huge stone around their neck that defined a lot of their life in a really negative way.  They had to deal with collections harrassment, garnishment, denied rental applications, trashed credit reports, and a generally lower standard of living for about ten years, and even now we live two states away from our friends and family for a job that lets them pay them.  So student debt can be very bad debt to carry if it's in excess of what you can afford, since there's no real way to wipe it in a BK like other consumer debt, but it's also the case that if it's taken out in the right amount and in the right way student loan debt can be a pretty powerful financial tool.  My spouse left undergrad with debt about 4.5x their first-year pay, and about 2/3 of it in private loans, which has been a very steep hill to climb.  If you can finance your degree for no more than 1x your expected first-year pay, if you can do so with only or mostly federal loans, and if the degree you're pursing will give you access to higher lifetime earnings than the education level that you had before, then I think student loans will usually make sense for you because 1) the cost will be manageable in the near term and 2) hugely offset by the gains in the long term.  Your father may be looking at your pursuit of higher education through the lens of the costs a degree carried when he was college age which, depending on his age now, may have been at a time when working your way through college without debt was much more feasible.  Iirc my dad paid for his 2 years community and 2 years university w/ summer and part-time jobs and didn't take on any student debt until grad school.  College costs are much, much higher today and, while the easy availability of student loans in large amounts has probably been one of the drivers of that increase, they're still a necessity for most students now if they want access to the incomes that post-secondary education can provide.


Message 3 of 5
calyx
Super Contributor

Re: Is a student loan that bad?

It totally depends on the situation.   If you're in the middle of school, can take out loans to finish your degree and get a job, then great!

It's like car loans - are they bad?  no, they're neutral, how you use them and handle them is what is good or bad.

Just borrow what you need (and nothing else) and pay them off (while staying on top of any servicers, because it's the customer service that is usually bad).

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Message 4 of 5
StudentDream
New Member

Re: Is a student loan that bad?

A lot of people say they are really bad because they get stuck with predatory lenders. 

I think it depends on what type of lender you go to. I have heard very little complaints about student loans from well established banks, but I've heard plenty about Sallie Mae, College Ave etc. (private lenders).

It also depends on what type of borrower you are. If you know that you can complete the monthly payments and you are extremely confident on the terms and conditions then they are not "bad" per say.

 

I think your fathers idea of you leaving for one year to work might be a good idea. Also, since you are a recently divorced mother of three and you're going to a communtity college, they should be able to grant you some type of grant.

Have you tried FASFA? or grants for displaced homemakers? 

Message 5 of 5
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