Student Loans – Are They Really That Bad?


There’s been a lot of talk about student loans lately, and they’ve become quite the controversial topic in some circles. And while many people look down on the idea and see it as something harmful that should ultimately be avoided, the reality is quite different from that. At least for those who know how to manage their finances, that is. The truth is that student loans have been specifically designed to maximize the benefits for both sides, and while they do have the potential to put you in a difficult financial situation in the long run, that mostly boils down to how well you plan ahead.

Many things should factor into your decision on whether or not to take out a student loan in the first place. This is something you should take an educated approach to. You can also see it as a good learning opportunity for managing debt in the future. Although, of course, you’d ideally not have to deal with any more loans after you’ve graduated and have entered the workforce.

Not All Degrees Are Equal

First of all, figure out what you want to study. Or, more importantly, figure out if the degree you want to pursue is actually a viable path worth taking out a loan for. The thing is, you need to know what your job prospects are before you even start studying. And while the job market is certainly quite variable and can be difficult to predict, there are some established trends that you can follow.

A STEM degree is often a good idea if you want something solid with a good degree of certainty for its future usefulness. However, if you don’t feel an inspiration for studying this type of material, you should not force yourself into it. Studying the wrong kind of degree just because of its potential future job prospects is a quick way to burn yourself out. And that’s before you’ve even gotten your first job!

Saving Money in Advance

You should also consider how you can help yourself on your own, without relying on your loan exclusively. Many students – or future students – underestimate their potential for earning some extra money to pad their income with. Just because you’ve taken out a student loan doesn’t mean that you should kick back and rely on that money exclusively. Quite on the contrary, now is a good time to figure out how you can earn some extra money on your own.

Consider taking an extra year off before you start university to gather up some extra cash as well. This can make a huge difference in the way you approach your studies and the kind of loan you take out. It can allow you to go for a smaller loan, which can have good implications on your future when it comes to repaying it later on.

Alternative Uses for the Extra Cash

Some people also try to come up with creative ideas for supplementing their income while they’re studying, and they use their student loans for that purpose occasionally. Keep in mind that this might be highly regulated and not available as an option though. You may have to report exactly what you’re doing with your money, and prove that it’s been going towards your studies and nothing else.

Starting a side business while you’re studying can definitely provide you with a great income boost if you play your cards right though. Not many students have what it takes to pull that off, but if you have a knack for running a business, it can be a very attractive option. It can also put you in a better position later on when it comes to repaying your debt, as you’ll have a financial foundation to stand on. Many students don’t have that when they graduate.

Have a Backup Plan

Know what you’re going to do if all else fails. It might sound simple, but it’s surprising how many young people are absolutely clueless about setting up a backup plan for their finances in case their degrees don’t work out. It doesn’t have to be anything grand, but you should definitely think of something that can keep you afloat in case you have to extend your studies, or have trouble finding a job after graduating.

In the end, student loans are not too different from most other types of loans. The fact that you can’t easily default on one shouldn’t scare you away. It’s still a good option for those with a responsible mindset and a plan for the future that seems feasible enough. If you can’t see yourself maintaining your payments on time and/or you don’t have enough motivation to follow through with your studies though, it might not be the most appropriate option for you.

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