Years ago, student loans were a sure ticket to college access for those with the hopes of graduating and securing jobs in the future. However, this is not the case anymore, and as seen by the great shift from financial loans to personal funding, more students are growing weary of securing college loans because of the future risk that the loans pose.
It is quite a paradox when college loans meant to improve the quality of education end up creating a nation of young students buried in tuition debt. Even more alarming is the fact that some students drop out of school because of the perceived high debt risk in the future. Either way, these students still end up with lump sums to pay, and sadly no college degree to their name. As a result, more students are shying away from government loans and loans from lending institutions because that path’s outcome is unclear.
Upon graduation, students are ecstatic to have earned a college degree. However, the other side of this is the huge student debt that has accumulated during those years. To financial institutions, this is a red flag for furnishing such an individual with a new loan. The students must first prove they are able to clear out their first loans before they can hope to apply for others. Credit cards on the other hand don’t help, as they are a trap for fresh graduates out of college. Due to a lack of finances or relying on odd jobs to repay the initial debt, the student is forced to search for other means of making money to survive.
Credit cards are usually readily available since they offer the chance to spend money that one doesn’t have. However, most experts of economics will argue that this is digging oneself further down the financial debt pit created in the college years. The current housing reviews in the UK may also not favor those students graduating out of college with loans. This means spending less to furnish college loans, zero chances of stocking up surplus finances in savings and the dimmed hope of ever owning a house through a mortgage plan.
With such odds, it is clear why students hoping to join college are not ready to secure the student college funds. The funding meant to expand college entry to produce more contributors to the national GDP is actually doing the opposite.