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Should You Get a Student Loan for College?

guide should you get a student loan for college

While getting a college degree isn’t the only way to secure a successful career, it does open up a wealth of opportunities that can pave the way for an individual’s financial security and personal and professional development in the future. This is especially the case in countries like the Philippines, where employers still place a heavy emphasis on educational attainment when vetting job candidates. Unfortunately, the cost of a university education in the country has only risen over time and is expected to keep increasing in the years to come.

Families preparing to send a child to college have to take into account much more than just enrollment fees. Apart from tuition, they’ll also have to shoulder the cost of books, school supplies, transportation, and other expenses. Students who attend college outside of their hometowns may also have to spend on lodging for the duration of their stay at university. 

The steep cost of a college education may often make it seem like a degree is beyond the reach of all but the most well-off individuals, but that’s not the case. There are many ways that students in need of financial assistance can secure the necessary funding for their college education. For instance, student loans are an accessible, inclusive financing option for families who don’t have the means to cover the cost of a university education upfront. This helpful guide will tell you all you need to know about student loans in the Philippines.

What is a Student Loan?

A student loan, also known as a tuition loan, tuition installment plan, or education loan, is a type of loan issued to cover the costs of a person’s education. The amount of money borrowed on loan is usually used for tuition and other school fees, student accommodations, schoolbooks and supplies, and other education-related costs. Student loans are one type of financial aid available to students in the Philippines, alongside grants and scholarships. 

How Do Student Loans Differ from Other Types of Financial Aid?

Although grants, loans, and scholarships sound similar and may even be confused for one another, they operate very differently. To better understand the differences, let’s take a quick look at each of these three types of financial assistance:

  • Scholarships – A scholarship is a type of financial aid that is awarded based either on students’ academic performance or on their skills in a particular area, such as athletics. A scholarship may cover a student’s tuition and school fees on a yearly or per-semester basis, and it may also be withdrawn by the sponsoring organization if the student fails to fulfill certain conditions. A student on an athletic scholarship for volleyball, for example, would need to be part of the university’s volleyball team for their entire stay in college to keep benefiting from this financial aid.
  • Grants – Grants refer to sums of money provided to the student in the form of cash. Some grants are awarded based on the student’s academic performance, whereas others may take the applicant’s economic status into account. The amount of money provided by the grant may be used to cover tuition costs and other school expenses.
  • Student Loans – Unlike grants and scholarships, student loans must be repaid according to the terms and conditions stipulated in the loan agreement. Students and their families can choose to take out loans from banks or from government organizations. 

Because student loans need to be paid back over the course of the loan term, some people may wonder how they qualify as a form of financial aid. One explanation is that student loans don’t usually require students to meet a particular level of academic, athletic, or other skill-based performance. Instead, they’re open to any student who can manage the stipulated repayment terms. Furthermore, student loans still alleviate the financial burden of going to school during the borrower’s college years. In most cases, students can use the borrowed money to complete their education and work toward repaying it after graduating.

What Are the Benefits of Getting a Student Loan?

Taking out a student loan has long been one of the most reliable ways that families in need of financial assistance can manage the cost of college for their children. If you and your family are currently looking for practical funding options for your education, here are a few compelling reasons to consider student loans:

Doesn’t Require a Particular Credit Score

Unlike applications for credit cards, housing loans, or personal loans, some won’t consider your or your parents’ credit scores when processing your application for a student loan. For institutions like the Social Security System and Pag-ibig, members who are active and up to date with their contributions usually qualify for a loan. This means that as long as you comply with the requirements and submit the correct paperwork, you’ll probably have a decent chance of being approved.

More Affordable than Other Loan Types

The interest rates on student loans are some of the lowest available, starting as low as 0.50% monthly. Certain government student loans also don’t charge application fees.

Manageable Repayment Schemes

Some student loans require repayment by the end of the current semester, but most tuition loans in the Philippines have fairly generous terms. Most lenders will allow the borrower to start paying off the loan after graduation, once they’ve landed their first job.

At the end of the day, there’s no reason to let your financial situation stop you from working toward your dreams. If you secure a legitimate student loan from a reputable lender, you can stop worrying about funding your studies and instead make the most of your college years.

Also read: LIST: Private Scholarship Programs for College Students in the Philippines (2023 Edition)

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