By Vanessa Papas
Getting a good education is expensive and not everyone is blessed with the means to attend college or university. Even former First Lady of the United Stated Michelle Obama and Hollywood stars Jane Lynch, Kerry Washington and Miles Teller were forced to take out student loans.
“There is no doubt that education impacts on one’s future career and lifestyle, opening doors of opportunity. However, with the challenge of daily living expenses, it can be difficult to take up the once-in-a-lifetime opportunity of tertiary education,” says Nkazi Sokhulu, chief executive officer at Yalu, a company that facilitates insurance cover. “Student loans can be an effective solution to getting necessary education, setting you on a path which facilitates financial independence.”
Nkazi offers this advice to those both young and old who may be thinking of getting a student loan.
What Are Your Options?
There are the lucky few who can afford to finance their education or receive a bursary, but for many a tertiary education is a pipe dream. A very real option that most seem to shy away from, however, is taking out a student loan where a parent or guardian services the loan during the student’s term of study. The instalment payments typically become the student’s responsibility after graduation. Generally, loans are obtained from a bank which gives a grace period of up to six-months after graduation, allowing the graduate to find employment before repaying the loan.
Benefits Of An Advanced Student Loan:
The advance of a student loan provides you with an essential key to establishing a secure foundation of education and future employment in the workplace. While in some cases taking out a student loan is seen as an unaffordable luxury, most people don’t do the homework to see how much a student loan would actually cost them and what alternatives are available to make this option a more affordable one.
Read It Thoroughly: Start by checking the fine print of the loan to see if you are being charged credit life insurance as part of the loan amount. Most Student Loan providers make Credit Life Insurance mandatory and add the insurance premium onto the loan instalment amount. Consumers have the option to shop around for alternative credit life insurance to get the best deal. It is also important that consumers read the policy carefully to find out what they are covered for and under what circumstances the policy will pay – this is not always easily understandable so when in doubt, get a professional to help you.
Pay Extra Each Month: Pay over and above your instalment amount on your student loan. This reduces the interest and payment period of the loan.
Keep Your Living Expenses Low: If possible, remain at home as your first choice during your studies and in your first years of working so that you don’t incur additional costs on accommodation. However, if your institution or workplace is far away, you should consider sharing accommodation as a way of reducing expenses.
Make Money On The Side: Take on a part-time job such as waitering or tutoring. While it may add extra pressure to your time and studies, it can help cover expenses, plus you have the added benefit of starting to earn your own money.
Research Your Options: Look around for a credit life insurance that will help you pay less on your monthly student loan instalments. Search online to find out the different loan options and repayment plans so that you can select the one best suited to your requirements.
Plan Ahead: It is important to plan ahead to anticipate future circumstances. This applies specially to living expenses and for when the student loan money is deposited into your account. Because it is a lot of money which can be used at your discretion, it may be tempting to use on items other than studies.
Pay the institution first and potentially put the rest away into a 32-day call account from which you can draw when funds are needed for living expenses related to your studies.
Don’t Lose Track Of The End Goal: Keep in mind why you are getting the loan in the first place – to provide you with education and access to better life opportunities. In this way your loan becomes your passport to your desired future, transforming you into a seasoned traveller of the workplace with the world of a successful career at your feet.