So, all my fellow readers out there…I bring you the final results for the July/August Student Loan Poll which asked you “Students borrow more on Student Loan than required – Is that true?’
The results were as expected, 76% voters were in favor while 24% did not agree to it.

I bring you this post to justify the results….

What are these Student Loans?

Growing cost of education makes it impossible to fund the expenses out of savings. Hence students resort to taking loans for their education. Keeping in mind the rising cost both government and private lenders offer a variety of loans to students at nominal rates.

Why do they need a Student Loan when other financial aids such as Scholarships and Grants are available?

Scholarships and Grants require a particular accomplishment or a unique talent or a prescribed financial condition to be availed. Not all of us fit into such requirements. You can quote a number of reasons why they are not in a position to go for scholarships or grants. Loans are available to all students irrespective of their talent, course of study, financial and social status. The only requirement they have, that too in the case of private loans is a good credit score.

What is the purpose of Student Loan?

Student Loan cater to the student’s requirement to fund his education which is otherwise not affordable and which he promises to repayment after completing his studies and into a decent employment.

Are Student Loan used for the said purpose?

Yes, they are used for the purpose of their education. As one would say ‘every rule has its exception’. There could be some miscreants who misuse the loan for purposes other than studies.

Why do students end up taking more loans?

In the scenario of growing cost and quality of education they need be prepared for unexpected expenses that come in the way of proceeding with the education. Applying for a Student Loan and realizing the amount takes a long time, which makes him apply for higher amounts to meet the unexpected.

Huge Student Loan liability ahead

As students they are hardly aware of the consequences of huge loans and their respective implications in future. Proper care and caution are hardly exercised in cases where no proper guidance is taken while applying for educational loan. This makes them indebted even before they earn.

Is the system perfect enough?

Though absolute care is taken at every end of the process to ensure that Student Loan serves the purpose for which it is issued, intentional violation sometimes cannot be stopped

Why people think more loans are being taken?

It is only after completing their studies that students understand their position and liability ahead. Their inability to meet the loan commitment and the unending repayment saga leaves them puzzled wondering at the cost of education and the related liability.

How do we substantiate?

We can substantiate the fact that students take more loans than required, by analyzing the repayment structure and timing and the resulting pressures undergone by them for further loans in order to keep up their credit score and reduce their liability. This analysis only tells us that the mistake lies at the start of the process of taking more loans than required.