Now I know this site has probably thrown a lot of information at you about student loans and how you can avoid paying them and what helps you get loan forgiveness and things like that. This is going to go back to the basics a little bit and help you understand student loans a little better. It’s going to help you see what that loan does for you in the first place so you’ll know why you might actually want to get one (even without knowing how to get out of paying it later).
So the reason I got my student loan was because I wanted to continue my education. I had been going to community college which was great. I actually got two associate’s degrees there. But I really wanted to keep going and get a bachelor’s degree and that wasn’t going to happen at the community college level. I also happened to have a pretty big school in mind to transfer to. My grades were great so there was no question of my getting in. The question was how to come up with the tuition. Up until that point I had been able to pay for my education by myself (and with some help from my parents). Going to a university however was going to be more expensive.
Two Types of Loans
I looked into student loans as an option for how to get the money that I needed. I knew that once I got a job after getting my degree (yes I actually believed that I would get a job as soon as I graduated) I would have the money I needed to pay off that loan. So I checked out my options and found out that I had two. I could get a subsidized loan or an unsubsidized loan which are explained in more detail here.
Subsidized loans don’t have interest while you’re in school and they don’t have interest for six months after you graduate. So basically the government gives you the money and you get to go to school and then they let you keep it for the entire time you’re attending school plus six months. Then they start sending you a bill each month and you slowly pay off the loan over time.
Unsubsidized loans don’t need to be paid back right away either. You get the same amount of time while you’re in school (as long as you’re attending part time) and you get a six month grace period. The difference here is that even though the money isn’t due you still accrue interest. So the entire time that your loan is out there you are adding to it each month.
It didn’t take much for me to decide what type of loan I wanted. Of course I had to get a cosigner because I had no credit to speak of (not that I destroyed it just that I had never owned anything that gave me credit). If you need to get a loan without a cosigner check out the article Student Loan Without a Cosigner.
Getting the Loan
Getting a loan is actually a lot easier than you might think. It took me signing a couple papers and mailing them in and then I had to take ‘financial counseling’ which was really just a type of slideshow online and then I was done. They sent the money to my school and I was able to start. It was the easiest $5500 I had ever gotten in my life. (Actually it was the only time I ever got $5500 in one shot before.) So I was able to go to college and get my degree without any problems at all. Everything seemed great until I graduated and wasn’t able to get a job.
Paying it Back
This month is when my loan comes due. They actually give you about seven months after you stop going to school before they make that first payment due but you start getting interest when that sixth month ends. So I have a student loan I need to start making payments on that already has one month of interest and will continue to accrue as I try to pay it off. And where am I working with my fancy bachelor’s degree? I’m working in retail. That’s right I have the same job that I had during my community college days.
So when I say that I feel your pain trying to find a way to pay off your student loans it’s actually true. I know what it’s like to have to come up with that money (I’ve been trying to scrounge around my budget as well) and I definitely know what it’s like not to get that great job right after you graduate. Getting a loan is good if you want to further your education just make sure that you have a plan to pay it off that doesn’t include getting a great job after school and never count on getting the loan forgiven unless you’re going into the military. If you want to know more check it out here.