Mind the trap

The appeal of the student loan for undergraduates and postgraduates may be too enticing for some individuals to consider other means of self-funding.  A lump sum of money at the beginning of your academic year with no pressure to repay until you are earning a minimum salary may seem like a financial boost not to miss.  But be weary.

Student loans are a necessity in some cases and help many students to further their education and provide financial stability while studying.  But a loan is a debt, plain and simple and you should consider at the time how you plan to repay your loan.

I took out a loan in my second year of my undergraduate degree.  I chose to live at home while I studied to reduce the financial burden of studying and having a child.  Unfortunately, my grandmother died in my second year of study so I had no choice but to take out a student loan.  I was very hesitant at first, because the idea of finishing my studies with a debt was not part of my plan. I came across an article which referred to student loan as a good debt, not sure how debt can be good, but nevertheless it made sense. I had bills to pay, so to allay my trepidations, I devised a plan to repay the loan as soon as possible and had decided that I would make extra repayments to pay the loan off quicker.

The student loans in my second and third year of my undergraduate degree were my first and last.  I had no intention of taking out another loan to further my studies.  I believed there was an alternative way.  For about a year after finishing my first degree, alongside working full time, I worked as a homecare assistant for an agency, so my hours were very flexible, about 10 hours a week.  I used this time and money to get my finances in order.

I self-funded my masters by working full time and studying part time, one evening a week.  I was able to pay the fee in instalments without accruing extra charges.  I divided the yearly fee into three instalments and paid at the end of each semester.  I found this much more manageable.  I had to make some sacrifices, for instance reduce my clothes shopping and budget wisely, but it was worth it.

I was fortunate enough to receive 80% funding for my PhD from my employer after going through a vigorous application process and then appealing against their decision not to fund my studies, but I won the appeal and paid 20% of my course fees each year.

There are means to pay for your further studies.  Always consider all your options and if you have to take out a loan try going for the minimum amount and think about how you intend to repay the loan before you decide to borrow.

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