College is tough; there is no doubt about that. However, it is usually long after college that the struggle really begins and you have to start paying back your student loans. When you go through a collegiate program, whether that is for your bachelors, doctorate or for an MBA, you have to spend a lot of money to before graduation. You not only have to pay for tuition, which could be thousands of dollars each term, you also have to spend money on texts books and living expenses. Moreover, because you are so busy, it’s hard to make all that much extra cash working – even a part time job.
However, before you take out a student loan, it can help to know some of the common college debt myths because you don’t want to find yourself backed into a fiscal corner as soon as you complete your education and start to look for work in your chosen field. Here are some common college debt myths that you should know.
- Your entire loan will be due in one lump sum immediately after college or your credit will be forever destroyed.
While your credit may take a hit after college due to any number of reasons, with a little planning and strong fiscal management you can steadily improve your credit ratings over time.
Nearly all loans will offer monthly payment plans that allow you to slowly repay your debt over time. It may take years, or even decades, before you send in your last payment, but rest assured that your total balance will not come due upon graduation.
- You’ll never be able to pay back your loan because the cost of tuition will be higher than any money that you make in the future.
This is partly true – but only the part where the cost of tuition is getting higher. Ideally, your new college degree will help you secure a well paying job in your desired field. If you find a program is that offers a lot of available jobs, you can easily make enough money to pay back your loans. For instance, there is NEC’s masters in project management, which allows you the opportunity to secure a promising job in a management field. With this position, your career path will be on a trajectory that will allow you to cover your college costs and debts.
- You have to start worrying about your debts when you leave college.
Well, yes, you do have to worry about your debts when you leave college, but you may also worry about your debts when you are in college, too. While taking on considerable debt is not something to be taken lightly, there are options to help repay your loan without having to sacrifice outer living essentials. A detailed budget can help make sure you don’t go into credit card debt in order to pay for your student loan bills. If you need more assistance, then you can look into debt consolidation plans or deferment options to lessen your financial burden immediately after graduation.
- You will have a full-blown college debt crisis when you graduate.
People like to throw around the word crisis when talking about college loan debt. However, while the industry shows that loan debt exceeds credit card debt, there are plenty of steps you can take to ensure that you finish college with the ability to repay your loans over time.
- You will have strong credit if you simply pay back your loans.
Many people believe that college loan debt is a good kind of debt that helps improve their credit scores. However, it’s the unfortunately truth that college loan debt can actually be harmful to your credit score. In the end, you want to work quickly to pay this debt back if you don’t want your credit to suffer.