Student Loan Programs

1116 Words Dec 18th, 2012 5 Pages
Student Loan Programs

The beginning of a college education is an eventful and exciting chapter for America’s youth. Beginning college is also when responsibilities begin to kick in as well. Students must plan ahead how they intend to finance their education during their time at college and after completing their academic careers. Almost seventy percent of college students nationwide take out loans to help finance their education. Like any other loan, student loans must be paid off in a timely manner to avoid hurting personal credit for future investments. The government has various student loan programs to assist students with not only paying for college, but also with paying off these loans after college. The most common type of
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It may feel like free money to the pockets when receiving the refund checks, but all of it needs to be paid back at a point. This is a common mistake made by students during their college careers. Managing finances when in school is a crucial part of building a credit history because student loans tend to be the first type of credit for those in college. It is also the first type of real debt incurred by many. Late loan payments seriously harm credit records and ruin a credit history for years. This is why paying off these loans is the safest way to go when building a positive credit history. Late payments that add up often pose as obstacles when taking out auto loans and mortgages as well. This is only fair, because if a student fails to carry out the responsibility of paying back a student loan, then they are not proven responsible when it comes to other types of credit either. (smartmoney.com) Late loan payments indeed take a toll on an individual’s credit history. When a loan payment has not been made for two hundred seventy days after it was due, that student loan is considered to be in default. The defaulted loan is turned over to a collection agency, and the government notifies every credit bureau. This information remains on an individual’s credit report for seven years. Not paying the defaulted loan as soon as possible means having federal income tax refunds withheld and added to
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