Education Funding

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One of the most valid reasons for getting a loan is to pay for further education. Student loans are offered on a preferential basis to all who qualify for the university. They are offered to help the student finance his or her education fees. 

Parents are financially exhausted. Parents pale when they see college-cost projections. The burden is heavy. As the price of a degree goes up, your income and assets tend to increase over time too. However, the price of highly selective private colleges may rise faster than our disposable incomes. No matter how, there is always a way to pay for college. There are five sources of education funds:

1. Savings and Investments
This is the cheapest source of money. When you save in advance, you cover part of the tuition with money you earn from interest, dividends, and capital gains. Many parents take up educational insurance policies for their babies nowadays as soon as they are born. 

2. Current Income
Spending current income reduces your standard of living for as long as the college bills last. 

3. Loans
This is the most costly source of funds, because loan-interest payments hang around your neck for years. Young college graduates can probably handle the payments. Students can borrow without collateral, co-signers, or credit histories. Students can get the cheapest loans. They get low interest loans and can look forward to a lifetime of rising incomes. Parents are not so lucky. Loans for parents carry higher interest rates, and they have to pass a credit check. Loans mortgage their future, at a time when they may not have much working time left. 

To get a student loan, students need to show financial need. Students need to apply for a student loan as soon as their college accepts them. Usually students can choose when to start paying their monthly repayments -- either 60 days after they had borrow the money or after the student finally leaves school. If the students defer repayment, the interest accumulates and their loans get larger. Usually people who take Private Student Loans go for those that defer principal payments until the student is out of school. 

For students who are oppressed by student loan payments, there is a way out. As long as they are out of school, they have loans and their payments are up to date, they can consolidate their debt. Student Loan Consolidation reduces their monthly payments, by stretching out their loan for another 10-25 years. The interest rate would be equal the weighted average of all the loans put together or whichever is greater. Student Loan Consolidation means many extra years of nondeductible interest payments, often at a higher rate than what you are paying now. You might still be paying off the cost of your own education when it is time for your children to enter school! For college students, graduates, Parents with PLUS loans, etc you can find out the details and advantages of student loan consolidation from NextStudent.

4. Work
The 'work-study' program is open to middle-income kids as well as the poor. It lets students earn some of their tuition by taking a job. Some schools provide jobs for any student who need them. 

5. Grants
A grant is the college subsidy of choice. Free money goes to students in the greatest need. But hardly anyone gets a totally free ride. Grants are nice when you can get them. Most needy students get an aid package made up of low-interest loans and a work-study job, as well as a grant. Most colleges make need-based grants in the form of tuition discounts. Special grants often go to scholars, musicians and other students with unusual talents. Every year, thousands of students compete for private scholarships offered by foundations, clubs, corporations and civic groups. Some awards are based on merit while most take financial need into consideration.