When to Get a Student Loan
BY G. EDWARD REID
s a rule of thumb, getting a college degree will enhance your income capability for the rest of your life. If you don’t have the money you need to finish your education, it might be appropriate to get a “student loan,” but only after you have become aware of the following points.
1. Getting a loan is fairly easy. Paying it back with interest is the hard part.
2. Most government-backed student loans cannot be discharged in bankruptcy. The only way to get out from under the obligation of the loan is to pay it off or die.
3. Make sure that the education you are funding with the student loan will lead to a job—a better job than you now have and with higher income.
4. Apply for all of the grants and scholarships that you may qualify for. You don’t have to pay these back!
5. Have parents help with educational costs. In Bible times parents gave their children land for their inheritance so they could make a living farming. Today most of us are not farmers so our “inheritance” should be something that would help us to become independent adults. That is an education!
6. Work and save in the summers and work part-time during the school year. This will help to minimize the amount you have to borrow, if any. The work experience will also be a good education and provide the much sought after “experience” that prospective employers want you to possess.
7. If after doing all of this you still need to borrow some to finish your degree, don’t borrow all you “qualify” for—just borrow the very minimum you need to pay your bill. Student loans have to be paid off with interest. The less debt you have when you finish school the quicker it can be paid off and you can then go on to other things—such as saving up a down payment for your home.
In an ideal world there would be no borrowing and no debt. But since we don’t live in an ideal world, there may be times when it is necessary to borrow. Just make sure that you borrow the very minimum you need and then plan to pay it off as quickly as possible to save on interest costs.
G. Edward Reid is the stewardship director for the North American Division of the Seventh-day Adventist Church and author of several books including It’s Your Money, Isn’t It?