What is a student Loan?
A student loan is a type of financial aid specifically designed to help students cover the costs of higher education, including tuition, fees, books, and living expenses. Student loans are borrowed funds that must be repaid with interest over time. They enable individuals to pursue education beyond high school, such as attending colleges, universities, vocational schools, or other post-secondary institutions.
Here are 3 main known facts about student loans.
1. Student loan debt is not dis-chargeable in bankruptcy
Unlike other types of debt, such as credit card debt or medical bills, student loan debt cannot be easily discharged through bankruptcy. This means that even if a borrower faces extreme financial hardship, they are still responsible for repaying their student loans.
2. Student loan debt can be inherited
In some cases, if a borrower passes away with outstanding student loan debt, their debt can be passed on to their family members or co-signers. This can create a significant financial burden for loved ones who may not have been aware of or prepared for this responsibility.
3. Student loan debt can affect credit scores and future opportunities
Failing to make timely payments or defaulting on student loans can have a negative impact on a borrower’s credit score. This can make it more difficult to secure future loans, such as mortgages or car loans, and may even affect job prospects as some employers conduct credit checks as part of their hiring process.
