Student Loan - Research Paper Example

Loan of the of the Answer I am planning to pursuit 4 years Bachelor of Technology degree I will pursuit my graduation in Electronics and Communication Engineering. In this graduation course, different aspects of the electronics and telecommunication engineering are thought. After the completion of this graduation course I will get job opportunities in several recognized electronics and communication organizations. Answer 2 In case of private institution my college education will cost almost $100000 in 4 years.

In case of state owned institution it will cost almost $80000. Answer 3 I will stick to my graduation completion plan. I will not take up any extra course of interest. This 4 years long course requires significant amount of concentration and dedication. I don’t want to distract myself from the original course. I want to give my best and full effort to this course which will be fruitful for me in future. Answer 4 Unfortunately, if I fail in this course or dropout then I will not be able to repay my educational loan because I will also not get any job from the campus placement, neither from any off-campus interview.

So, it will not be possible for me to repay the loan by myself. In that case bank might pressurize me and my co borrower to repay the loan. Answer 5 Yes it is obliviously necessary for me to pass all the courses. According to the criterion of FASA, students should maintain minimum stipulated GPA to get the continuous financial aids. This regulation has increased the importance of each and every course during the graduation. If I fail in any one or more than one courses then my GPA will be below the threshold limit to get the financial aid.

Answer 6 Current economic crisis will affect the financial aid in negative ways. Financial institution like banks will be directly affected by the slowing economy. Banks will face significant liquidity problems to lend the money. Banking organizations will not give the loans easily they will give loan after lots of back ground checking. Interest rates of loans repayment will be significantly high. Answer 7 There are significant changes have taken place. The Federal Government has increased its subsidized student loan interest rate by two times.

The new interest rate will be 6.8%. Brown’s bill came into the picture to resurrect the situation by 15% of the total outstanding student debt. Answer 8 Cosigning, co-borrowing or guarantying a student loan is significantly risky because hundred percent responsibility lies with the co-borrower to repay the loan. In most of the cases, there is no other way to avoid the repayment of student loan. According to the Federal law, student loan has no statute limitations. Banks can ask for student loan for indefinite period of time from the co borrower.

Answer 9 The act of cosigning can affect the co-signers credit availability significantly. If the borrower could not able to repay the loan then the whole onuses lie with the cop borrower. If the co borrower fails to repay then it will dent co borrower’s credit availability. In future, the co-borrower will face significant difficulty to get any loan or will not be able to cosign for any other loan. Answer 10 There are significant disadvantages for the student s with outstanding educational loan and no job prospect.

If there are no job prospects for the students then they will not be able to repay the existing loans. If the existing loans are not repaid, then the students will not be able to apply for another loan for further education. Answer 11 According to the Federal law, student loan is not volatile it can haunt the loan defaulter at any point of time in future. If student default in his educational loan then it can result in wage or salary garnishment in future. Even it can be problematic for the students in terms of future employment scope because, now days, employers are checking the credit reports of their potential employees.

Answer 12 There are no as such direct consequences for the college in case of student loan defaulter. But indirect consequences are certainly there. It may hamper the reputation of the collage. In future students who are considering for joining that collage, banks may not sanction the student loan for them. Answer 13 According to the research of Consumer Financial Protection Bureau, student loan debt has reached as high as $1.2 trillion. In between that $1 trillion is from the debt of Federal loan only.

It is the second highest form of the Federal debt right behind the mortgage debt. Overall Federal debt is $16.7 trillion and current student rate of default 12.31%. Loan default rate (Source: Stratford, 2012) The above picture is indicating increasing trends of student loan default in US. Answer 14 The default does affect the economic outlook significantly. It increases the fiscal deficit of the country. It contributes to the overall debts of the country’s economy. Recently US economy on the recovery phase but this kind of high student loan default has stalled the economic growth (Khalfani, 2007).

The amount of loan default increased abnormally and has reached up to $1 trillion. Answer 15 Financial consequences for the future generation will be severe. The next generation will come to this beautiful world with pressure of huge debts. The Federal law will not allow to foregone the student loan debt. In this case parents will not be able to save enough money for their future generations. Answer 16 Competitive advantages of the nation can be significantly hampered. It affects the nation’s economy directly in a negative way (Heller & Callender, 2013, pp. 89-90). The rest of the world will consider USA as a debt ridden country.

Different credit rating organizations will lower the ratings of the nation which will be an absolute competitive disadvantage for the country. Answer 17 Students have to repay their loans to the banks. The loan pay off comprises of principal and interest payments. Interests are calculated on the basis of principal amount. The particular rates on which interests are calculated are called interest rates. Answer 18 Amortization schedule is a table which calculates periodic blended loan payment.

The schedule indicates the amount of principal and interest for an educational loan payment. It is a structured process of repaying debts over a stipulated time and it considers regular payment of the loan. Answer 19 The first student loan payment will start after the expiry of the allotted tenure and grace period. Every student is provided with certain grace periods after the completion of school, collages and drop out below half time enrollment for settling their financial situations. Answer 20 Yes, it is wise to start paying student loan during the school or college time.

It reduces the burden of spending too much amount of money at a time (OConnell, 2004, pp. 112-113). Student should try to pay at least the interest of the loan on a regular basis during the school or college time. Answer 21 Consolidation of student loan is a contradictory matter. It can provide benefits in terms of lower monthly payments, simplifies the bill and minimizes the responsibility. On the other hand consolidation of debt will lead to significant head ache of paying too much of money in one time.

References Heller, D. E. & Callender, C., (2013). Student financing of higher education: a comparative perspective. New York: Routledge. Khalfani, L., (2007). Zero debt for college grads: from student loans to financial freedom. New York: Kaplan Publishing. OConnell, B., (2004). Free yourself from student loan debt: get out from under once and for all. New York: Kaplan Publishing. Stratford, M., (2012). Default rate on federal student loans rises again. Retrieved from: http://chronicle.com/article/Default-Rate-on-Federal/134786.