Is a Student Loan worth getting?

A student loan is something which you can borrow to cover the costs of higher education plus living expenses while you are studying. They are available in many countries and can add up to a lot of money. They work differently in different countries but will often be treated differently to other debt with regards to your credit record.
You will not need to prove you can repay the loan in the same way as with other sorts of lending. You may not need to repay until you are earning over a certain amount of money and it is very unlikely that any repayments would be necessary until the course was completed. However, course fees and living expenses are expensive and it is possible to leave with a huge amount of debt owing. It can be hard to know whether it is worthwhile.

Some people feel that studying is worthwhile whatever the cost. They feel that higher education gives them and experience that does not compare to anything else and therefore is worth any cost. Not everyone agrees with this though and do not think that having the debts is worthwhile. It is therefore worth some considerable thought.

If the education that you get will guarantee that you do a job that will be well paid and you will have plenty of money to live off and enough to easily manage the loan repayments, then it could be well worth it. But many courses do not lead directly to a job. Some require further study afterwards, some are in fields where there are very few jobs, some are purely academic and so applying the knowledge to a job is difficult. It is therefore worth planning what job you intend to get after the course to start with. Think about whether it would be worth doing some work experience first so that you can find out if you like the job before you pay all the money for the course. Also look into whether there is a different route to getting into the job. You may be able to work up through the company in the same time that it takes to study, you may be able to get an apprenticeship which pays for the course or there may be other alternatives.

The terms of a student loan are really important. You need to make sure that you understand exactly what you are taking on and what the expectations will be on you. In the UK, for example, the government have changed the terms of the loans and so it is worth noting that even though you sign up under certain circumstances those terms may change. It is also worth noting that in the UK, the student loan can be backed up by a grant if students come from a family of low earners. If they do not qualify for a grant, then parents or students may need to make up that extra themselves.

For some people they decide that working and saving could be a better option. They could do a few years of work while living at home and save some money and then work part time through university and pay that way. This could mean that there will be no debt or a reduced amount of debt and the work experience will be useful as well, particularly in getting a job when you finish the course.

If you do not like the idea of having a debt hanging over you, then a student loan may not be the answer for you. For some people the idea that they owe money can play on their mind a lot and make them feel unhappy, which is not good. A loan of this size will take a long time to pay back and therefore that is a lot of unhappiness to have to bear. However, if you want to work towards a career that needs further education then you will have no choice but to study and this will cost money and the loan could be the only option. Certain careers have no way in apart for getting a degree or further qualification. Therefore you will have to go to university if you want to get this sort of job.

There are probably a few simple questions to ask to help you to decide. Firstly, think about whether you can afford to pay without a loan or whether you can get a job for a few years and save up. Secondly consider whether the course you want to do is necessary for the career that you want to do. If you are not sure what you want to do then it is best to work for a while and only start studying when you know what you will use the qualifications for. If you are doing the course because you think it is a good experience, then it could be better to move out of home, get a job in a university town and hang out with students but not actually go to the classes! You will save a lot of money that way!

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