Loans

Common Financial Problems Facing Students Today

Debt Settlement

The average person likes to think that students have it easy. For one thing, they get to college which is more than most people of a certain generation. Then, while they’re there, they get to drink, party, and work for 8 to 10 hours a week. It sounds like a doddle, right? Sure, the university experience might not be as difficult as working for a living, but there are aspects which are just as problematic. The worst one, of course, is money because a typical student doesn’t have the cash to pay for their tuition. And, if they get a loan, they end up suffocating in debt.

So, the question is why does this scenario happen on a regular basis? To find an answer, you need to look into the common financial problems for the modern day student.

Debt Repayment

Some students don’t find it hard to balance the books while they are at college. It’s when they leave that things get tricky. A student loan is pretty much a necessity unless there is a rich aunt or uncle in the picture. Let’s face it – most people don’t have a spare couple of grand under their bed. The problem with securing a loan is the expected rate of return. For one thing, there is only a small grace period, lasting any time from 6 to 9 months. Then, there is the interest which the companies add on to make a higher return on their investment. Sure, there is a nursing student loan forgiveness scheme as well as a teaching one, but they don’t apply to every profession. And, individual students might not be eligible. The sad fact is that the average graduate can’t afford to keep up with the repayments, especially if they don’t land their dream job.

Reduced Loans

Not everyone struggles after graduation. Some people also struggle to get by while they are studying. Their life is a lot harder when the government decides to lower the loan amount too. For years, the authorities have been looking to cut costs any way possible. Due to the recession, there aren’t many areas which are ring-fenced. Student loans certainly aren’ as they suffer reductions on a regular basis. A student today might have to live off less than they did before even when the old amount wasn’t enough. Why don’t they get a job? Lots of employers aren’t recruiting, plus they need to study.

Parental Confusion

Every time a person applies for a student loan, they have to give in their parents’ tax receipts. The government uses them to work out how much they earn and if they are a viable source of income for the student. Funnily enough, the government often says they are when they aren’t. As a result, the loan companies refuse to provide additional help because they believe the parents have the money in their bank accounts. In truth, the parents can’t subsidize their children no matter how much they try. In the end, the kids are left in limbo because they’re not poor enough for state aid and not rich enough for their parents to pay.

One thing is for sure: when it comes to money, students have it hard. In fact, they have it way harder than the average person.