Introduction
Students receive higher education loans to fund and facilitate their learning. Many debates try to argue whether students should receive or not receive academic loans when in college or universities. The students use the loans to fund their education and personal needs (such as transport and food) while in college or university.
The following research will try to evaluate the benefits of higher education loans, trends, reasons, and factors that make students avoid loans.
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Review of literature
Definition of education loans
Education loans are sums of money borrowed to finance university, college and other expenses that are related to school. The payments are mainly deferred when the student is in school and for a certain period after graduation. Students who pursue university degree or diplomas are mostly awarded the loans. The loans can be accessed from private lenders or the government.
Governmental loans have low-interest rates and are preferred by most students. The private lenders give loans that have very high-interest rates, and they follow the traditional methods of lending unlike the federal lenders, which are fast and easy to apply. Federal student loans do not ask for credit checks and can subsidize the interest payments of a student.
Relationship between college loans and the rates of graduation
College loans and graduation rates are always associated, and there is a comprehensive correlation to the ethnicity and the race of the students. Zhan et al. (2018) performed an analysis of various trends and events that relate to college loans and graduation rates from 1997. The research showed that there is a positive relationship between college loans and graduation rates. The paper notes that more students are applying for higher education loans in recent days and that is why it is vital to examine the relationship to the graduation rates. The latter has increased by about 39% in the United States. The reason behind this increase relates to the rise in cost of college learning in the United States.
Additionally, many families and parents are not able to cover the rising costs in education. This makes their children seek student loans, which help them cover much of the education costs. On the other hand, federal loans are becoming more accessible compared to the past, and that is why student apply them in large numbers. The research also identifies that most students from minority communities and low-income backgrounds are the ones that are more likely to apply for the loans.
The statistics here show that college loans are beneficial to many students. They make it easy to access education, and that is why there are increased graduated rates over the years. Likewise, there are several reasons why the student chooses student loans over other sources such as financial aid.
Financial aid and higher education loans
Some students receive financial aid from various sources. These funds help them cover some education and learning costs. The county government or non-governmental organizations sometimes give these funds. It is however painful that these sources of funds tend to affect the ability and comfortability of students as they learn. These funds are sometimes late, and students fail to buy books and other items that make their learning more comfortable. According to Ziskin et al. (2009), this is a significant reason why the students prefer working rather than waiting for financial aid entirely.
Some apply for the financial aid and still proceed to work as they remain for the funds to be disbursed to their schools. Some students fail to apply to receive these funds because they feel that the systems used in the disbursement are not fair. Others feel that financial aids are not the best compared to other sources of college fees. Other have been advised to avoid using such aid by financial aid counselors.
The explanations here show that students will rather work than trust financial aids, especially those who live in urban areas. Others prefer to go on and apply for higher education loans because they are more secure and reach them in time.
Fear of Debts
It appears that even if many students are applying for higher education loans, some of them still fear academic loans because of the ideas of having debts. There is a study by Callendar & Jackson (2005) that has tried to evaluate the facts that have been left out in the trends of higher education loans.
The article was more concerned about the rising concerns about the issue of student loans. Even if the government has made the loans available and reduced the interest rates, it appears that some students are still against the use of these loans (Jackson & Reynolds, 2013).
Most of the student loan boards build issues that relate to the accumulation of debts, and that is what deters the student from applying for the loans.
Conclusion
To sum it all, it is evident that student loans are beneficial.
One benefit is that they fund college education for students who come from humble backgrounds. There is a trend that students from minority communities and low-income households are the biggest beneficiaries of the loans. Some students apply for these loans because they do not trust financial aid.
Another group of student that avoids applying these loans, as they do not like the ideas of having huge debts.
References
Callender, C., & Jackson, J. (2005). Does the fear of debt deter students from higher education?. Journal of social policy , 34 (4), 509-540.
Jackson, B. A., & Reynolds, J. R. (2013). The price of opportunity: Race, student loan debt, and college achievement. Sociological Inquiry , 83 (3), 335-368.
Zhan, M., Xiang, X. and Elliott III, W., 2018. How Much Is Too Much: Educational Loans and College Graduation. Educational Policy , 32 (7), pp.993-1017.
Ziskin, M., Fischer, M. A., Torres, V., Pellicciotti, B., & Player-Sanders, J. (2009). Working students' perceptions of paying for college: Understanding the connections between financial aid and work. The Review of Higher Education , 37 (4), 429-467.
