StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Is it better for student to take a loan or to save money - Case Study Example

Cite this document
Summary
They need money to buy books, conduct research, upkeep, travelling among others. However, small or lack of income makes them look for money from other sources. Among the options available…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91.7% of users find it useful
Is it better for student to take a loan or to save money
Read Text Preview

Extract of sample "Is it better for student to take a loan or to save money"

IS IT BETTER FOR TO TAKE A LOAN OR TO SAVE MONEY? are always in need of money because of the many activities theyare involved in. They need money to buy books, conduct research, upkeep, travelling among others. However, small or lack of income makes them look for money from other sources. Among the options available to them is a loan. Additionally, some also resort to personal savings. However, it is not good for students to take loans but save money for their upkeep.One of the justifications for the student not to take a loan is because it is expensive (Shen 2010).

The cost of education is very expensive, and these make students adopt a considerable amount of money in the form of loans. Tuition fee takes the greater share of the loan before other expenses such as books, housing and this is a huge burned to the student. In some cases, the loan increases when the student has to repay with interest. This tends to be cumbersome for any student since it accumulates to the extent that it becomes difficult repaying. Economists argue that student’s loans should be interest free and subsidized to facilitate recovery (Christie 2015).

Secondly, repayment of student loans can last for many decades, and it becomes a burden to the student (Shen 2010). It ties a student in a debt for a longer period hence can miss many opportunities that come to those who do not have debts. Economists argue that it makes it hard for students to build up an emergency savings account, and they cannot save money for retirement (Christie 2015). This is mostly in cases when a student has to pay the loan for a longer period of 15-25 years. Students who save do not have such burdens and are relieved.

Thirdly, taking a loan can run a student’s credit history (Shen 2010). Students who default to pay their loans stand higher chances of blacklisting hence unable to get employment or borrow money from the financial institutions. Similarly, inability to pay the loan within the stipulated time harms the students because it affects the credit history making it prolongs the expected duration of clearance. Thoma (2015), an economist argues that student should not take loan they are unable to pay because it puts them into unintended debt.

Additionally, student loans must be repaid with or without graduating (Shen 2010). This is very dangerous to students who do not graduate and lacks job opportunities. It forces them to look for the money elsewhere, hence putting pressure on them. Thoma (2015) notes that it becomes hard for people who do not have a stable income or earning less to repay such amount because their income is not enough even for themselves.Despite all these, student loans are necessary for making students complete their studies (Shen 2010).

It gives one an opportunity to complete school and then search for money to repay. Hiltonsmith, who is an economist argue that students who are unable to assess loans have minimum chances of attending colleges for personal saving is not always enough to make one complete school and buy all the requirements (2015).From the above economists view, it is not good for students to take loan instead save. Only one economist supports students to take loan. Therefore, students should use the little saving they have and complete their studies.

ReferenceChristie, H 2015, Student loan debt is preventing millions of Millennials and Gen Xers from buying their first homes -- and that is having a big impact on the housing market. Available from http://money.cnn.com/2014/09/24/real_estate/student-loan-debt-home- buying/ [ March 7, 2015]Hiltonsmith, R 2015, How students debt reduces lifetime wealth. Available from http://www.demos.org/what-cost-how-student-debt-reduces-lifetime-wealth [March 7, 2015]Thoma, S 2015, Students loan deliquesce rate defies overall downward trend.

Available from http://economistsview.typepad.com/economistsview/2015/02/student-loan-delinquency- rate-defies-overall-downward-trend.html [March 7, 2015]Shen, H 2010, Advantages and disadvantages of students loans repayment patterns. International Education Studies, 3(1) pp. 45-49

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Is it better for student to take a loan or to save money Case Study”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1681504-is-it-better-for-student-to-take-a-loan-or-to-save-money
(Is It Better for Student to Take a Loan or to Save Money Case Study)
https://studentshare.org/finance-accounting/1681504-is-it-better-for-student-to-take-a-loan-or-to-save-money.
“Is It Better for Student to Take a Loan or to Save Money Case Study”, n.d. https://studentshare.org/finance-accounting/1681504-is-it-better-for-student-to-take-a-loan-or-to-save-money.
  • Cited: 0 times

CHECK THESE SAMPLES OF Is it better for student to take a loan or to save money

A Survey of Student Debt

Do you know the amount of money you will owe the debtors by the time you finish your higher education?... Although many students receive scholarship or fee bursaries and other loans from relatives, personal savings and money from partners, many students rely on student loans.... Moreover, the higher percentages of students fund their accommodations and living expenses through student loans and parents/ guardians or relative's money to help.... herefore, the student loan debts has become the norm for many families and young people seeking higher education....
6 Pages (1500 words) Essay

The Increasing College Tuition

This arguments and matters may actually discourage other students anticipating on joining college when especially they think about the increasing cost of Fees and increasing money to pay back as loans after college.... Life has generally become very demanding and expensive and thus the college students require more money.... The school swore to its faculty and its student body that they will focus on limiting the number of the students admitted into the campus and thus their focus is to the end and limit the increase of the students into the university....
5 Pages (1250 words) Essay

A Policy of Full State Financing of Students in the UK

In the UK and in other countries of the world, higher education is confronted with three problems - universities are inadequately funded, escalating apprehensions about quality, the dearth of student support, proportion of students coming from underprivileged environments is deplorably insignificant and the financing of universities is in the state of collapse since money is sourced from general taxation, however, the beneficiaries are those coming from more affluent conditions (Barr, 2003, p....
9 Pages (2250 words) Essay

Financial Securtiy for College Students

All goes well until a student is able to make the minimum payment every month but after graduation he/she has a loan amounting to the credit card's maximum limit and an interest to pay that nearly equals the limit itself. Hi-fi lifestyle becomes harder to be abandoned once donned.... Henceforth comes the search for student financial aid.... Financial planning becomes important even at this budding stage since the marketers of credit cards believe such students o be a prime target. … Addressing the issue of credit cards, the pit hole that causes the fall is that, not only students but also people in general do not feel like spending real money when that is done using credit cards....
5 Pages (1250 words) Essay

Our Position in Education Is Cut Away

In 2004, Bush made federal education spending cuts in several key educational areas including $680 million in No Child Left Behind, $393 million in the after-school programs and $304 million for… In the same year, public college tuition went up by 14 percent nationally while Bush proposed cutting Pell Grants by $260 million....
7 Pages (1750 words) Essay

Free Higher Education at the United States

The increase in tuition makes families who want their kids to have a proper chance to make a living go to lenders and credit-card companies for student aid where interest rate are unfair.... With the endless rise of student loan debts, the lending companies The United States government has to step up and take control of Higher education.... Because of this competitive pressure student loan debt has increasingly become one of the main problems Americans face....
5 Pages (1250 words) Essay

Student debt management and student budgeting

The relevance of articles on Debt 101 for student fiscal management is undeniable.... Provincial and private money lending sources account for the rest of the loaned money (Debt 101, 2012).... Provincial and private money lending sources account for the rest of the loaned money (Debt 101, 2012).... CanLearn covers various aspects of student loan financing and repayment in detail though the language is a little advanced....
2 Pages (500 words) Research Paper

Why Student Loans Need to Be Reformed

Since they do not get to negotiate the terms of the loans as they are mostly only interested in getting money to take them through college, they find that after they receive and spend the cash the deal may have been more complicated than they anticipated.... The paper “Why Student Loans Need to Be Reformed” focuses on student loans, which are unnecessarily harsh on school leavers, and there is an urgent need to reform the entire student loan system to give these students a better start to life and to unburden them....
5 Pages (1250 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us