We're now used to the idea we have to get a student loan in order to go to college, but evidence shows student loans should be avoided at all costs.
The government has been suing colleges, claiming they're predatory lenders. If you think about this matter from a logical point of view, you'll also see student loan lenders are, in fact, predatory lenders.
Think of it this way: yYu get a loan to pay for a degree to get a job, but you eventually find out your degree doesn't get you a job or you don't manage to graduate.
You get a loan which doesn't get you what you've paid for. Of course, the matter is very complex, and the decision is ultimately up to you, but these are the reasons you should avoid getting a student loan if you can.
1. Most people don't graduate after just four years.
When you get a student loan, you're confident you will graduate in four years. But the reality is, most students graduate in five or six years.
This adds two more years of huge expenses to your loan. The numbers show only 19 percent of students graduate in 4 years, while at the best colleges only 36 percent of the students graduate in four years. Moreover, if you try to switch colleges, your credits might not transfer.
Those extra years are putting students in more debt than they initially calculated, which becomes a huge burden.
2. There is a chance you wont even make it to the finish line.
A staggering 41 percent of all students don't graduate at all, which means your odds of getting out of college with a degree are lower than you've thought.
This can happen because the student loses interest in school, has different expectations for the experience or life events get in the way.
You have to think twice before getting an expensive student loan.
3. Student debt will prevent you from having a home.
In the past, most first time home buyers had been college grads, but this changed in the last years. More and more grads are actually moving back with their parents, as they're unable to afford rent, not to mention a mortgage (if they even qualify for it).
With a huge student debt on your back, you won't be able to get a mortgage, even if the lending rules become more “relaxed."
4. The student loan debt stays with you.
The student loan debt is more stubborn than other debts. While a mortgage or a credit card debt can be filed for bankruptcy, the student debt keeps pilling up. The more you delay the payments, the bigger the debt will become, as the government is determined to get their money back.
Sometimes, people end up with three times their initial student debt!
One of the methods used to get the money back are tanking your credit score, which might be solved later on, with help from a credit repair company.
You definitely need to perform your due diligence when picking a credit repair company. To put it into perspective, you can expect to spend between 300 and 500 dollars on your credit repair over the course of a year.
However, the government also has other ways to get the money, so they can take your tax refunds. They can also take 15 percent of your Social Security. The government can also take your wage without calling you in court, so they will take their money back one way or another.
5. More and more students can't get ahead of their loans.
While there's no way to escape student loans, more and more former students are trapped by it.
If you look at the official numbers, they'll show 10 to 13 percent, but the actual percentage of people not paying back their student loan is around 30 percent.
The difference comes from the fact most stats don't include the delays under nine months late.
Sometimes, when the opportunity is too great, student loans are impossible to pass up. But when deciding between state and private institutions, really weigh the different price tags. The decision you make about four years can follow you for the rest of your life.