With the heavy debate over loans in class and for our group project, student loans top the charts of discussion. Loans, as a tool of public action, are something you must pay back or it defaults on the government. However, the WSJ clearly demonstrates the difference between student loans and mortgage loans. Finance experts see "good debt" as something that strengthens your financial position over time. However, good does not always mean easy. With student loans, if you are unable to pay you must be able to prove you cannot provide the minimal standard of living and you have provided a good faith effort to repay the loans. Student loans are considered good because of the low interest rates and flexible payment schedules; but they are not as easy as having a mortgage loan and just being able to hand the keys over when running into financial trouble.
http://blogs.wsj.com/hire-education/2010/10/15/the-fine-print-on-student-loans/
Michelle Watkins
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good article Michelle especially for our project! There has been articles that mention the steady increase of rates making it difficult to pay month to month but student loans are more consistant then mortage loans thats for sure. What makes student loans more flexible then others is the companies give us until the day we graduate to hold off on paying for anything which makes it much easier to maintain and even prepare for payments in the future!
ReplyDeleteElizabeth has it right on; the biggest difference about these two loans is the fact student loans are payed back after graduation. Mortgage loans have to be paid back + interest every month. I don't believe in "good debt" as I feel any debt is bad. A mortgage loan is much different than a student loan, if the student takes advantage of this loan he will be able to afford a house with a good mortgage; if he doesn't obtain a student loan and can't afford college, then he'l never be able to obtain a Mortgage loan anyways..
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