Banks and other financial institutions that prey on college students by giving loans for colleges are relying on the fact that you might not know what the loan might entail for you in the future. If not explained properly, your small little debt might grow to become a huge one with the interest accumulated. Without the proper financial knowledge, loan will become an obstacle in obtaining a quality education. In past eras, money was utilized for all intents and purposes for every purchase. Today, money is once in a while utilized. The way we shop has changed also. Internet shopping has turned into the top decision for some more youthful customers, making sufficient chances to utilize and overextend credit, a very simple approach to amass debt,
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A poor credit score will affect one’s ability to get certain jobs, insurances, and mortgages for home at a lower interest rate. A poor credit score will even affect one’s ability to get credit card(s) at a lower interest rate as well, because the company will view you as a “risk”. College students must comprehend what it will take to reimburse the student loan debt they will be taking on. They have to understand that the decisions they make to take on debt early in life could profoundly affect their lives after college. Without the basics of financial literacy, this is a problem that many will continue to …show more content…
They should advise the student before the student proceed to take on a loan. Maybe the school can have a mandatory financial literacy class that teach college students how to budget, spend money responsibly, and the importance of saving money. The government could also do more by requiring high schools to teach a course on the basics of financial literacy. That way, future college students will have exposure to financial management early in life, a valuable resource to have, so the student can mold their habits. Debt shouldn’t be an obstacle in obtaining a college education.
Ultimately, the best way to avoid debt is to not take out student loans in the first place. Before taking out a loan, the student should really look for other options, such as grants, scholarships, and etc. Loan should never be the first option. It should be the last option. With basic financial literacy, the student should understand that grants and scholarships are money that you don’t have to pay back. It’s time we challenge this problem with some actionable
A poor credit score will affect one’s ability to get certain jobs, insurances, and mortgages for home at a lower interest rate. A poor credit score will even affect one’s ability to get credit card(s) at a lower interest rate as well, because the company will view you as a “risk”. College students must comprehend what it will take to reimburse the student loan debt they will be taking on. They have to understand that the decisions they make to take on debt early in life could profoundly affect their lives after college. Without the basics of financial literacy, this is a problem that many will continue to …show more content…
They should advise the student before the student proceed to take on a loan. Maybe the school can have a mandatory financial literacy class that teach college students how to budget, spend money responsibly, and the importance of saving money. The government could also do more by requiring high schools to teach a course on the basics of financial literacy. That way, future college students will have exposure to financial management early in life, a valuable resource to have, so the student can mold their habits. Debt shouldn’t be an obstacle in obtaining a college education.
Ultimately, the best way to avoid debt is to not take out student loans in the first place. Before taking out a loan, the student should really look for other options, such as grants, scholarships, and etc. Loan should never be the first option. It should be the last option. With basic financial literacy, the student should understand that grants and scholarships are money that you don’t have to pay back. It’s time we challenge this problem with some actionable