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The Truth About Student Loans

Hello all,
     Once again, I have borrowed (stolen? hijacked? kidnapped?) some great information from our Developmental Advisor, Erica Osborne. Erica worked in the Office of Financial Aid in a previous life, so she steps in as the ARC’s FA guru. Take it away, Erica!


 Does the word bring dread and fear and thoughts of never ending debt that swallows you whole?

 In a perfect world, loans would never be needed to fund higher education. In a perfect world, your child would be able to earn so many scholarships that they wouldn’t so much as need to pay for single pencil. In a perfect world, your child would have been given a college savings plan even before birth by wealthy grandparents eager rid themselves of retirement savings.

 However, we don’t live in a perfect world.  

 The reality is that the majority of students will have to borrow loans to finance their college education, or their parents will borrow loans on their behalf. Or maybe a combination of both.

 But why the reluctance to borrow a loan when it comes to paying for a college education?

 When you bought a house, you took out a loan. When you bought a car, you probably took out a loan. Why don’t we have the same attitude towards loans that will help our son and daughter achieve a college degree? After all, just like purchasing a home, a college education is a major investment. But unlike buying a vehicle, there is a much higher return on a college degree.

 Of course, it’s always better not to have to take out loans. When facing the option of debt vs. no debt, no debt is the obvious choice. It doesn’t take Suze Orman to tell you that.  

However, getting a college degree without any debt at all is simply not a reality for the majority of families. Though many of us grew up with parents and grandparents telling tales of “working their way through college,” it simply isn’t possible for today’s under 21 population to come up with that kind of cash at their side job at Starbucks.

 But consider this; the loans that are available to students through the Free Application for Federal Student Aid (FAFSA) are some of the best kind of loans out there, offering in some cases no-interest loans while the student is in school, low fixed-interest loans, and even repayment plans that can be income based or repayable via a 10-year plan. And when you consider that a student’s degree will help them to earn a salary for the remainder of their lives, taking out a loan to pay for higher education is an investment worth making.

 Loans borrowed for college are not bad. They are, in essence, “good” debt. They may have gotten a bad rap because they fall into the debt category, but they don’t need to be shoved in to the same classification alongside credit cards.  Contrary to popular belief, student loan debt doesn’t scare away potential creditors in the future. Your student, obviously, will be expected to repay the loan on time in accordance with their repayment plan, but having student loan debt won’t prevent them from being able to score a good rate on a mortgage or other loan they may need in the future.

 Give loans a chance. You buy the best home for your family, and the safest car you can find; your tuition money is an investment, too, and you get what pay for.

Erica Osborne, c/o 2004
Developmental Advisor, ARC


About Cassie

I'm the Director of the Writing Center and Director of Parent Communications at Bellarmine University.

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