Monday, December 29, 2008

beware of student education loans

In India, as education for medical and engineering studies are becoming more and more costly, particularly in private colleges, it is common for students to take out education loans.

Most of the students might be taking on these loans in the hope of landing jobs with high wages as soon as they graduate. But they have to remember that many things can happen in the duration of a 4 to 5 year course. If for some reason, the student has some arrear papers by the time he finishes the course, or if the job market for that particular branch of study is not very strong , the student will find it very hard to find a job to support himself and pay off the student loan (some loans might have a 1 year or so grace period after the course duration before repayment starts. ). Even an average student will only start at an entry level position in his job ladder and will take many years before he might have enough experience to get the high wages that he might have dreamt of as a student.

So before you take out huge loans, read and do research about the interest rates(fixed/floating etc) , repayment details, relative chance of jobs in fields related to current education, aptitude of the student in the chosen field of study etc

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