Loan for Students in USA

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Loan for education in USA : In third world countries, there is one problem in common which is that the quality education is very expensive. The students mostly come from a poor background which makes them even impossible for them to even think about higher studies in a reputed institution. But when we the see the developed nations of the world, mostly the education is free and cheaper which is one of the bigger reasons of them to be more developed. They take care of their young brains and invest on them as they want their future to be secure. But this not everyone’s case as it has been seen that many students who want to be graduate from college and study further, it is becoming difficult for them without having consider student loans.

It’s now becoming harder and harder to do graduation without having the student loans. One thing that needs to be evaluated that if somebody wants to study in US, then he or she have to evaluate the total money needed to do study there including the careful estimation of all the expenses.

What is the need of Student loans

As a student, one needs to research about the scholarships and its procedures. They need to know how to apply. The willing students have to keep an eye on scholarships or financial aid schemes, than they have to find some money sources. After completing these stages, it has been scene that mostly international still have financial problems that need to be solved. This is where student loans are needed. Their policy mainly is to provide easy pay service to the students, mostly they started paying back these loans after they finished graduation and started a job.

What Student Loan actually is

In the US, there are basically two types of loans which are:

  • Federal Student Loans
  • International Student Loans

Federal Student Loans

These loans are for the local US natives and these cannot be given to international students according the government policy. The students who are willing to be educated in the top most private institutes consider this loan as their way to be educated.

International Student Loans

These are available for international students willing to study in the US. Specialized private student loans are available to international students. The thing is, it is now becoming a realistic way to get the needed money for education in the US. The good thing about these loans is that they are repayable on easy repayment terms. These loans are good enough to pay for your entire education with reasonable interest rates.

The impact of these loans

Well, it has been seen that these loans have a huge impact on the lives of students. Exceptions are there in some cases but overall, it is a good idea for the needy students to have their education completed. Most of the students who have the degree of US university get jobs quite easily after their education finishes. This is a question that how to effectively manage your salary because after all, you have to pay back the loans you received so the first few years might be a little tough but after sometime, life will become pretty smooth.

Is there a need of Co-Signer in USA

For international students, the answer of this question is; Yes. If you want get the international student loan then you must have a co-signer in US. A co-signer is a person or party who is in the obligation legally to pay the debt if the student is unable to pay the loan back. The condition for the co-signer is that he/she must have the nationality of US with good credit history and also must have stayed in the US for the past two years. Most of the international students name their relatives or friends as co-signer to avoid any sort of difficult circumstances.

The Repayment of Student Loans

The student loan repayment program depends upon the type of loan you choose. Many international works and study at the same time in US but there are quite a number of students who are not doing this or unable to do this. Now, here comes the decision making of the student because he or she have to pay back what has been given to them, either pay back in monthly installments, if yes, then how much you will be able to pay monthly. These are some questions that are needed to be answered by the students themselves. The period of repayment varies for different amount and type of loans but usually it is to be given in 10 years.

What are the Payment Options

The following types of repayment plan options are there:

  • Full Deferral
  • Interest Only
  • Immediate Repayment

Full Deferral

In this option, students have given a delay of 6 months after they have completed their education to settle down themselves before starting payments. As long as four years can be deferred but not more than that.

Interest Only

In this type of plan, you pay just the interest while studying and after you have completed it, you will be given time of about 45 days as the delay and then start paying back your debt.

Immediate Repayment

In this type, you started paying back the debt along with interest soon the loan is dispersed. There is no delay or deferral of any duration.

Some statistics about Student Loans

According to White House, 70% of the bachelor degree holders completed their education by having the service of student loan which indicates the success rate it has over the years. This debt counts up to $1.3 trillion. It is the second highest level of consumer debt in the US behind only Mortgages.

The recent research study shows that one of every four student has some debt or loan to pay back in the US. About 16 percent of the college graduates graduated with excessive debts to pay.

Alarming situation is that about 40% of the students who take student loans are not paying back or if they are, than they are behind their target. On 40 million borrowers of the student loans in the US, the average debt comes out to be $29000.

 

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