If you have a child who is still in middle school or high school and has plans for going to go to college try and encourage them into some sort of extracurricular activity that will help with scholarships and grants. You may also look into state grants. Nevada offers up to ten-thousand dollars in free financial aid for the first four years of college as long as the cumulative grade meets a certain average. But ten-thousand dollars may just be bucket bait for some schools, that are higher bracket and ivy league.
State Colleges and Community Colleges are reasonably inexpensive. Some have four-year programs and some do not. If your son or daughter does not know exactly what area of study they are going to go into, and just wanted to get the core requirements out of the way so they can move on later to a career goal. It might be a good idea to consider a state or community college. Most of these junior colleges are fully accredited, and if you're beginning student decides on pursuing a degree in a field that they have chosen after receiving an associate, or bachelor’s degree they can transfer their grades to another accredited college. The smaller colleges provide a cheaper more inexpensive alternative way to get going.
For students who do know what field of study they want to go into from the get-go, look for as much financial aid and scholarship programs that are available to them. Get this financial aid so they can avoid racking up huge student loans that may take years or even decades to pay off. There is no one going around teaching people how student loans work and how they will affect your credit in the years to come. Loan institutions start calling in their marker soon after graduation commences.
Here is how the student loans work, and how they will impact your credit until they are paid off. Before I explain let me say that they are never forgiven, not even in bankruptcy, so you are stuck with them until they are paid in full. Here is what happens: Multiple accounts are created around a single loan. This way your loan hits all three credit reporting bureaus. It doesn’t matter if you are receiving single bills, your loan is split into multiples. The reason the loan servicer does this is to create as many individual accounts as they can, so the borrower is unable to address or challenge a single loan. You have to go after all of them to find some kind of result, and that’s not easy when dealing with large credit reporting institutions like Experian, Trans-Union, and Equifax.
As you go through school and are borrowing for each semester, a new separate account is opened, a different account from the first one. When graduation rolls around you could have ten separate loans showing up on your credit report, which can turn you right into a high-risk borrower, if you don’t find a job right away and start making payments immediately. So, if you are behind when the time comes to buy a car or a home the interest rate will not be attractive and may very well be beyond affordable means. If you pay the loans on time, things should be okay. Student Loans can help you by establishing credit early on, but still, be careful how much you borrow.
Try to borrow the least amount of money as you can. If a time comes where you decided to attend a high-level school for a masters or doctorate degree, then that might be the time to pull the trigger on a loan, but still, keep in mind how you are going to be able to pay the loans off in a reasonable amount of time. When entering the workforce look for employers that offer to pay off all or a portion of your Student Loans. Many businesses do offer this compensation as a perk to help new workers payoff their Student Loans and get back on their feet. Try speaking to your loan servicer into combining all of your payments into a single loan, so if you wind up paying late one month it comes up on one account, not ten, which will impact your credit much less than a late on multiple accounts. If the loan servicer digs their heels in and refuses to consolidate the loans, then contact us and we should be able to help.
Comments