Student loans

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Student loans

Student loans are those which are obtained by students to be used as payment for their educational expenses such as tuition, books, and food and living expenses. These are loans which assist in the furtherance of the right of students to education.

Every person has a right to education. In fact, the United Nations has recognized this right to be necessary for the exercise of other rights. Many countries have enforced different programs to be able to comply with providing the students with education. However, because of some of the countries’ economic conditions, the right to education seems to be a challenge in their part. As such, many institutions have set up these loans to be able to answer the problem.


Nature of Student loans

Being commonly used by students, student loans are usually charged with low interest rates, and their maturity date is longer and may be deferred while the student is still studying. Because of the flexibility of these loans, students will only have to worry about passing their courses and eventually finishing their schooling.

Student loans may differ from one country to another. Some may not charge interest rates, while some do not require repayment for as long as the student agrees to work for the school when he finishes. Nevertheless, they all have the same purpose- to help the student finish schooling.

Different types of loans

Student loans are classified into two types:
1. Government loans
Government loans are those which are granted to students of government-run schools, usually in the form of scholarship. Some countries limit the grant to the top students of the batch, while other countries require the filing of an application. Government loans do not charge interest rates, but the conditions for granting are strict.

2. Private loans
Private loans are those which are given out by foundations and charitable institutions to students of both government and private schools. These loans charge a very low interest rate and payment can be made after the student has finished schooling.

Advice In Acquisition
In obtaining student loans, a student must consider the following:
1. Strictly use the funds for educational purposes
A student, upon receiving the proceeds of the loan, must use it strictly for his tuition fees, books, materials, and living expenses. He must not use it in any other purpose at all costs.

The strict limitation is important because the fund to be granted to the student is not dependent on his claims, but is dependent on his family’s financial condition. Schools may assess him based on different criteria, such as the ownership of certain properties like air conditioning units, laptop computers, and cars. If the school, based on its criteria, finds out that he is not capable of owning certain assets and earning a certain income, then he may be granted these loans. Otherwise, he will not be granted the loan.

2. Do not combine personal money with funds from student loans
One mistake of students when having too much money is to combine their personal funds with that obtained from these loans. This must not be done because he may spend the money that is intended for his education on other personal matters.

A student must always keep his personal money separate from the proceeds of these loans because the money should be used for educational purposes. This is because he might spend it on other things. He might be aware that he possesses funds from these loans, but later on, he might forget the same and end up spending it for personal purposes. Also, because these loans are granted at a specific amount, spending may lead him to deficiencies in the future.

3. Pay back the loan when funds are available
While most student loans allow its repayment until the student finishes schooling, he does not need to wait for that time to come. As soon as funds are available, he must take the initiative to pay the proceeds of the loan even without demand from the issuing body. This is because these loans, like other loans, also pile up, and in the event the amount reaches a certain magnitude, he may not be able to pay it at the time it becomes due and demandable.

4. Maintain proper behavior while the loan subsists
At times, one of the determining criteria for the issuing body to grant the loan is the overall performance of the student. This relates not only to his academic performance, but also to his personal upbringing. As such, if the issuing body finds out that the student applicant is always involved in criminal incidents and is known to have been convicted of crimes relating to drug abuse, his loan benefit may be revoked and the proceeds may be demanded from him soon.

This system does not deprive the student of his right to education. It serves, however, to divert the funds which he could have used for his education to another student who possesses the satisfactory qualifications. Proper behavior is also critical to government loans because the money being used to send students to schools comes from the taxpayers.

5. Take advantage of the long period of time
In paying the loan, a student must take advantage of the long period of time granted by the terms and conditions of the agreement. He must not wait for the due date before he pays.

Conclusion – Student loans

Student loans are used exclusively for educational purposes. It serves as the student’s life and blood to continue pursuing his dreams and to successfully contribute to the success of his country.