While considering the college education, students need all kind of financial aids be it scholarships, grants or loans. Student loans can be burdensome be it for the reasons of applying for it or the interest that it may carry but at the same time there are a lot of upsides to it as well. Student loans can either be federal or private with their own distinctive advantages.
Helps to Establish Credit
According to Bruce Mesnekoff Director of Student Loan help Center making regular payments on students helps you to build up your credit score since you can get student loans with low credit or even no credit. These good credit scores will help you meet your future financial goals.
Federal loans provide flexible repayment options. You can choose the payment based on your income for instance extended repayment resulting into lesser monthly amount or payment which changes with your income. Also you have the option of stopping the repayment for certain amount of time due to some tough conditions.
The interest gets deducted from your income resulting into reduced tax burden. The maximum interest that can be deducted is $2500 or the total interest paid whichever is lower. It has to be filled in Form 1040 however IRS has created income limit for deductions following which you are not eligible for deductions if your income is above a certain bracket.
Subsidized Student Loans
Federal student loans are subsidized for students meeting the financial criteria as determined by FAFSA. As per Bruce Mesnekoff , As long as the eligible student is enrolled with the accredited university, government will pay accruing interest on loan principle.
Lower Interest Rate
In some cases borrower may get lower interest rate from private lenders as compared to federal programs. They offer various incentives as well to attract business. Also private lenders have varying interest rate while federal programs have fixed interest rate.
Many employers are helping employees for the repayment of student loans as a recruiting strategy. It is a part of benefits package offered. Though the number of such companies is small, a lot of companies are I pipeline to implement this plan.
So what is required is a thorough analysis of the kind of loan that satisfies your education requirements based on pros and cons. This takes away the worry to arrange for financial resources and students can focus on studying to grab a job resulting into a great career.
For More Information Contact Bruce Mesnekoff on Linkedin