Living off student loans, is it a good idea?

paymentdue19152167.jpgEducation is expensive. It is also entirely necessary. We all know that we need to get a good education. It costs a great deal but it is one of the basic necessities of being trained for work in our economy. Going to school is hard. Many of us hate to work but we also know that going to school means some serious challenges. It means studying hard and having to take exams. Many people who are working hard at school would like to be working a normal job, and many people working a normal job would like to be in school. Because school is so expensive you will probably need to borrow some money to make it. Student loans can be a great investment if your education will work to make you a stable income. Education is usually a good investment. However, student loans are kind of a strange thing. With some loans they just hand over the money to you. This can be sort of strange situation. Suddenly you have all this money and nobody telling you how to spend it.

Realize that student loans will have different provisions depending on the loan. Do not spend your student loan money on anything that the loan does not stipulate you to spend on. If you have questions about what you can use the money for contact the lender before spending any money. Student loans are designed to do a few things for you. First they are to help you pay for tuition and for living expenses. This would include things like your room and board and text books. There might be some other expenses that you run into, such as transportation or rent if you live off campus. These would be OK uses of the money, assuming that this is something the loan allows. Beyond these sorts of expenses you should probably not spend your loan money on anything else. So it can be a good idea to live off your student loan money if it means that you get an education. This does mean, however, that you should be very careful with the funds. Only spend it on education related expenses and make sure that the money will be sufficient to help get you through your education. Avoid spending on anything frivolous. If you want to buy other stuff get a job and pay for it this way. Remember that you have to pay off your student loans so only spend what you will want to pay back. Chances are that you will not be very happy with yourself if you spend all your money on useless stuff and cannot get an education.

So maybe you have a little money left over after you have paid for all your education needs. What should you do? Should you spend it on just anything? You can if you want, but realize that you should probably save that money and use it to pay off part of the loan. Student loans can usually be locked in at low interest rates, but this doesn't mean that you won't be paying them off for the next several years. A large payment made right when you finish school could greatly reduce the total amount that you pay over the course of your life, meaning that you will pay off the loan sooner. Keep close track of the money you spend and watch to see if you are accidentaly spending loan money on other things. Be smart and you can make your education work.

Search our site for more information:

Like this article? Then Post To Digg
Or add it to your Bookmarks!

Recent Posts: « Tips for establishing a credit history | Main | Making ends meet during the holidays »



TrackBack URL for this entry:

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

All comments are coded with nofollow and reviewed before posting, so please don't waste your time or mine with comment or trackback spam on this site.

Copyright © 2006-2009 by Breakthrough Consulting, Inc. All Rights Reserved.