Today every parent wants their child to be well educated, graduated or post graduated, no matter if they are capable of affording the education fee or not. When the situation started becoming a common issue, and many cases came in front where a father took a loan for the studies of his son or daughter and was unable to pay it all back and committed suicide. Such suicide cases started becoming common. Then, the government came up with a solution and initiated a plan of student loan. Since the time the programme started, many things remained unclear except for an idea. The idea was, a person for whose education the parent is taking the loan for, has to pay back the mortgage along with interest as soon as starts earning. This plan gave satisfaction to the student, and he pays for his own expense.
Though the idea is brilliant, there are many things people usually do not know about student loans. The procedure is not so easy to understand; therefore, I am listing a few points you need to know about student loan:
Even if you get bankrupted someday, that will not free you from paying the debts of student loan. The student loan is like a gum, once stuck to you would not get off unless you wash it off. The only way you can pass the investment is, either if you die out of natural cause or you start working for a non-profit government agency. The better plan would be, you start planning on, how are you going to pay the loan and get done with as soon as possible, as there is no other way around to consider.
The interest on the loan can catch you off-guard any day and anytime. The rates are not constant all the time. If you get unlucky, it would be like you log in to the student loan account one day, and the principal amount you had to pay has hiked up to hundred dollars overnight with an email attached about the interest consolidation. Once this happens, there is nothing you would be able to do and will have to pay it back anyway.
There are two types of loans, the subsidized and unsubsidized. The subsidized loan is the money government lends you after checking through the documents which prove the financial need and therefore pays the interest amount all the while you are graduating or in the school. It also grants you six month of grace period where you could plan, from where are you going to pay the debts from now on. On the other hand, unsubsidized loans are the loans where you have to pay the interest, even while being in college, graduating. You would also not be granted the grace period. In this type, you do not require to give financial proof. You must be aware, which one are you applying for.