Many Americans rely on financial aid to fund their higher education. This aid can range from scholarships and grants, which do not have to be paid back, to federal loans, which are regulated by the government and have low interest rates with flexible repayment options. A payday loan or cash advance may even be considered when trying to get through the week.
These types of aids are secure and beneficial for students who cannot otherwise afford a college education, yet with rising costs they often do not completely foot the bill.
Frequently, federal loans and grants will cover tuition costs and enrollment fees, but fail to provide extra money for textbooks and supplies. This may leave a student enrolled in college courses without the means to purchase the required course materials, leading a student to fall behind in class.
As a result, many students seek out private loans as a secondary option to fund these smaller costs without fully considering the consequences of such a financial transaction. However, private loans are generally not the best bet for a variety of reasons. While it may seem counter intuitive, for those who have small school costs to cover a payday loan may be a better option
There are many issues associated with using private loans for small costs. For starters, private loans accrue much higher interest than their federal counterparts, costing students a significant amount of money in the long run. Unlike federal loans, most private loans are unsubsidized and begin accruing interest immediately, while the student is still in school. This means that the student pays more over the duration of the loan..
Private loans can also take a lot time to secure, meaning that a student may have to go without supplies for weeks. Generally, students borrow more in private loans than they actually need to cover school cost. Most students are young and fiscally inexperienced: when confronted with the opportunity to borrow thousands, they are less likely to limit themselves to the necessary $300, which is the average cost of textbooks. In turn, they end up with unnecessary debt after graduation.
Additionally, if a student fails to complete his/her degree, he/she is still responsible to pay back the borrowed amount plus interest. And, just like federal loans, private loans cannot be written off in a bankruptcy should said student come across financial hardships.
In contrast, payday loans allow students the opportunity to get the materials they need without all the long term commitments of a private loan. Payday advances are generally provided in small amounts which are more conducive to the costs of textbooks. Furthermore, they are nearly instantaneous, meaning that a student can get the required materials in a timely manner and avoid falling behind. Payday loans online require that an individual is employed prior to borrowing, which indicates that the student should have the income to repay the loan. Because payday loans are intended for short-use, they do not carry with them the long-term effects of private loans; rather, a student is expected to pay the loan off quickly, which can be feasibly done if the student is working. This encourages the student to partake in healthy and responsible working and borrowing practices.
Because education is important-a necessity in many cases-it is understandable that students and parents of students will go to extreme lengths to ensure collegiate success. Admittedly, payday loans can be dangerous if used irresponsibly. Yet, in a pinch, they can help cover the costs of textbooks and supplies without the baggage of a private loan.
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