For a child, the first long-term goal they ever decide is that of their future. What they want to do, and whether they would be happy doing it over a prolonged period. Once they decide that, the next decision is that of college. For a child, it is simply a matter of choice. For a parent, it is more complex. The average private university in the United States of America costs around 35,000 US Dollars, with another 25,000 Dollars for stay, food, and other purchases. For every parent, this is a substantial investment both in the short-term and long term. While universities do offer need-based aid, it often comes at the risk of lowered chances of acceptance, cautioning many applicants. With this in mind, there remain 2 primary choices one can make to fund their child’s education. Either, bear the entire cost and endure the possible effects of it. Or, opt for a college education loan, and pay it over an extended period.
The option of bearing the cost of college for parents themselves is instinctive. They see it as a solution to help streamline the experience for their college-bound child. Doing so also does reduce the implications associated with taking a college loan, both financially and psychologically. Without the worry of paying off a loan, college-going students have less pressure placed on them, allowing them a relatively seamless transition into college. However, this is a double-edged sword, as the implications now have to be entirely borne by the parents. In most cases, this leads to a negative impact on their comfort of living of varying order.
On the flip side, the option of a loan would do somewhat of the exact opposite. Should the application be accepted, the large monetary asset provided to parents means a far easier impact on their spending. Along with this, it allows parents to invest more of their money into their child’s education to enhance their experience. Additionally, doing so creates a responsibility on students. While the option remains for parents to pay the loan off themselves, choosing to involve their child develops their maturity. However, the long-term implications of a loan are also worth noting. Loans being different from grants, need to be paid back. While loans have lenient interest rates on them, the sheer sum of money required to be paid back often takes a large amount of time and serves as a constant constriction on the minds of students.
While considering the prospect of a college loan, it shouldn’t always be seen as a necessity. In practice, it can serve as a convenience, and in a way, also as a teaching tool. Barring the social stigma associated with a loan, it is a reasonably effective tool to teach students about financial responsibility and the importance of planning. However, doing so requires a few considerations. Firstly, taking a loan should be done only after consulting with one’s child and securing their affirmation to the same. On top of that, jobs right out of undergraduate tend to be on the lower spectrum of paying well. While they do pay more as time goes on, this would need to be considered. On top of that, other factors like job location and cost-of-living for that particular city would also play a role in the loan paying back process. Should the worst come to bear, parents should make a plan prior hand to assist their child in paying off the loan. Ideally, after consent is taken, parents would take a suitably sized loan to help fund their child’s college education, lowering the burden they have to bear on themselves. After graduating, both the parents and child would contribute towards paying off the loan. For families where a loan is a necessity, a mutual understanding between them and their child would benefit in the long run. For families where a loan is not a necessity but seen as a teaching tool, the pros heavily outweigh the cons.