Tuesday, March 26, 2013

Should My Kids Apply for an Educational Loan


Paying for University upfront is a luxury that many students simply can’t afford. The options are fairly limited, either their parents step in and pay for the tuition, or students are forced to take out an educational loan to cover the cost of their studies. Here are a few important things to keep in mind when considering whether your kids should apply for an educational loan.

What Is an Educational Loan?
Depending on the type of study and educational institution, there are a range of different loans available. Generally, the government will support students by loaning them the fees for their tuition, to be paid back at a later date. The repayments usually start when the student has graduated and is earning over a certain threshold for income.

The disadvantage to student educational loans is that it leaves your child with a huge debt hanging over their heads as soon as they graduate. Instead of enjoying the benefits of their years of hard work and study, they instead have to worry about substantial repayments coming out of their wage in their new career.

What Are the Other Options?
Unfortunately there aren’t many options for students unless their parents are in a position to financially support them through Uni. If you decide that you would like to help your child achieve their study goals, there are a few different ways you can start saving early.

Being Prepared for Educational Expenses
The best way to ensure that your child has the opportunity to study at University is to start saving as early as possible. Some parents take advantage of the re-draw facility on their mortgage, and make as many repayments as they can so the money is available when their child is ready to enrol. You can also open your own high interest savings account and have a specified amount automatically transferred from your wage to maximise your savings.

Another option is to invest in an Educational Savings Plan. This involves making regular contributions which often cannot be withdrawn unless it is for dedicated educational expenses. These plans can be quite restrictive, so always be fully aware of all the terms and conditions before you commit to investing.

Before you choose which way to start saving, you should look at consolidating and strengthening your current financial position. For a range of specialised financial services, contact a professional agency such as Fox Symes debt solutions. They can assist with budgeting, as well as organising debt consolidation and anything else you might require to begin saving for your child’s education.

Giving your child the very best chance of success involves investing in their education. Student loans are effective for families who simply cannot afford to support their children through University, however it then leaves your child with tens of thousands of dollars in debt when they graduate. You’d be surprised just how much you can save if you start early and seek professional advice. Your children will thank you for giving them the very best start to their future.
Written by Emma Jane

3 comments:

Small Business Loans October 12, 2013 at 2:08 AM  
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Business Cash Advance October 12, 2013 at 2:18 AM  

When we talk about refinancing a student loan, we generally mean taking out a new education loan with better terms and using it to pay off existing student debt. Refinancing your student loan could help you take advantage of any improvements in your credit profile that have occurred since you were a student, as well as today’s historically low interest rates. You would be able to lower your monthly payments and put the savings toward a financial goal, like starting a retirement plan or a small business.

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Mary Brown April 22, 2017 at 5:37 AM  

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