We all know that college education is expensive. It is for this reason that currently college debts rank as one of the highest reasons for debt among young people under the age of 30 years in the United States of America. Millions of college students are graduating and entering into the job market but spend a better part of their early working years paying off their college debts.
The unfortunate bit is that when these students were signing up for these loans, they never had a game plan on how they were going to finance them. In fact, they didn’t think through about the ramifications of taking out these loans.
Well, before you take out a college loan, here are the dangers you should be aware of.
College loans will lower your credit score
Student loans are generally treated like any other type of loan therefore, when a person defaults on them, it will ultimately negatively impact their credit score. As you may be aware, a low credit score damages your chances of being able to access credit in the future.
Outstanding college loans may prevent you from securing a job
A recent article published by CNN revealed that 34 per cent of companies in the United States of America perform credit checks as part of their background checks on potential employees. A history of defaulting on your payments may therefore give potential employers a negative impression about you and this may ultimately deny you a job.
College debt may prevent you from going to graduateschool
Think of it this way, if you accumulate too much debt in student loans during your under graduate program, and you cannot figure out how to pay off the debt, you will definitely not be able to afford to pay for your graduate school. It will be ill-advised to consider taking another loan at this time to finance grad school.
College debt will negatively affect your life goals
Most people aspire to become successful and financially secure in life. This is a goal that most students have when they graduate and hit the job market. However, with a large college debt on your shoulder, most of the money you will be making will be going towards debt repayment and this will affect achievement of your life goals. It will take much longer for you to achieve financial independence and raise your standard of living therefore taking much longer for you to realize your life goals.
As a student, it is advisable to think very clearly with a clear mind before exposing yourself to the nightmare of college debts.