Do Student Loans Mean Borrowed Future?

Do students set themselves up for the future of borrowed life and continuous debt? Let's ask an expert - Bernard M. Cornell. What does he think of the popular movie "Borrowed Future"? Is it true?

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Do Student Loans Mean Borrowed Future?

student loans

Student Loans

Surely many of you have heard or even watched the popular documentary called «Borrowed Future | How Student Loans Are Killing The American Dream». The movie tells about the history of student loans and about the fate of students who find themselves in a debt spiral after receiving a student loan. That is why today I, Bernard M. Cornell, would like to talk about how student loans work in general and how to look for funding sources when entering a higher education institution.

Loans for Students - What Do They Offer?

A person who studies every day very rarely has any income from an employment contract. The source of income is most often a scholarship, money sent by parents, or casual or part-time work. Based on such income, banks practically do not want to grant loans or credits. The exception may be a student loan, which allows you to get a high amount and an attractive interest rate. However, not everyone wants to be bound for a period of several years and the consequences associated with it.

Students willingly use modern technologies and prefer convenient solutions that can be used via a smartphone. That is why online loans are the best for them, which they can apply for completely remotely using any device with internet access.

A student loan is a universal cash loan that can be used for any purpose. Therefore, the funds can be freely spent, e.g. on the purchase of textbooks or payment of rent for an apartment, or used for pleasure, e.g. the purchase of a gym membership, electric scooter, new clothes, or to cover the costs of a trip to the mountains with friends.

Applying for such loans is simple and takes literally a few moments, and most importantly, it allows you to receive the necessary money straight to your account almost immediately. So you can get an additional cash injection even when visiting a shopping mall or just before going to the club with your friends.

How Do Students Get Loans For College

Generally, quick, non-bank loans are available to students who meet the following conditions:

  • have reached the appropriate age, you cannot always apply after reaching the age of majority
  • have a valid ID card,
  • have a permanent address of residence in the U.S.,
  • have their own bank account in their name (it cannot be the account of their parents),
  • they obtain income allowing them to repay the liability,
  • they are not in arrears in repayment of other loans and are not listed in debtor registers.

In order to receive such a loan, the student only needs to fill out an online application form with all the above information, after which the lenders usually transfer the funds on the same day.

Borrowed Future or How Student Loans Are Killing The American Dream

Of course, higher education is a huge investment in your future career and in your future life in general. Americans with a college degree, on average, earn 1 million dollars more than Americans without a college degree.

According to the statistics, more than 2 million students will go to college this year. 1.4 million will take out student loans. At first glance, it might seem like a good enough deal to get an education and pay off a loan right after graduation. However, you should remember that the interest rates on your loan significantly affect the final amount and increase every day.

You must understand that specialists immediately after graduation earn much less than those who have been in positions for several years. Given the fact that the average student debt is about $30,000, that could equal your salary in the early stages.

The amount of your debt will also depend on the educational institution you choose. According to U.S. report News & World Report for 2022-2023, the average cost of a public, in-state college will be $10,423, while tuition in a public, out-of-state college will reach $22,953, in a private one - $39,723. These are only tuition costs, not including accommodation, food, books and etc. That is why if you don't approach the issue of education funding wisely, you can find yourself in a debt spiral that will haunt you for a long time even after graduation.

That’s exactly why it is important to consider alternative funding options for college, which you can learn about below.

When Looking To Finance Higher Education, What Is The Best Order To Look For Funding Sources?

Before you rush to apply for a student loan, you should consider several alternative funding options.

  • Scholarships and Grants

This option is the most popular and getting it is not as difficult as it might seem at first glance. First of all, you should leave your application for the Free Application for Federal Student Aid. Also, you can contact the finance department of the college you are planning to attend so that they can provide you with information about all possible scholarships according to your achievements, hobbies and goals.

  • Federal Work-Study (FWS) Program

The Free Application for Federal Student Aid also provides you with information about the Federal Work-Study (FWS) Program, which has limited places. This program provides the opportunity to work part-time outside of college hours, for which, in turn, a part of your education will be paid.

  • Find a Job

Having to go to college right after high school is a big misconception. You can find a huge number of jobs in agriculture or transport, for example, without having to provide a college degree.

Thanks to this, you can save some money and go to college in a few years without having to take out a student loan.

Summary

Thus, applying for a student loan is only your decision and responsibility. As Summarized Sallie Mae´s private education loan underwriting standards by stating: "If the borrower can create condensation in the mirror, they need to get a loan this year." Sometimes there are situations when a student loan is indispensable and it is one of the few options for obtaining higher education. If you still decide to fill out an application and get a student loan, approach this carefully and wisely. 

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