About Short-Term Loans for College
Navigating the student loan process for college can be intimidating. The sheer number of loans available can be daunting. Short-term loans for college are an excellent way to supplement federal loans or your income if you need a small boost in cash flow.
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History
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Paying for college was a personal issue until the advent of college loans. In 1935, Indiana became the first state to offer limited financial assistance for students pursuing college. In 1957, the federal government first began programs for medical students, and by 1964, programs were available in the form of grants, loans and work study for a large number of students. As college became more expensive, private companies began offering special short-term loan options for college students.
Significance
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Short-term student loans for college allow more students to attend college without working full-time to pay for it. Government loans provide excellent assistance to a lot of students, but certain people are excluded from their ranks. Students whose parents make too much money, for instance, cannot get federal loans even if the parents are not contributing to the cost of college. Short-term student loans, because they are from private companies, can make rules to allow students in these types of situations to get loans.
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Misconceptions
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Some people mistakenly believe that student loan equals low interest rate. While that is true in many cases, it is not a universally true statement. Instead the interest rates can be higher for some short-term student loans for college. Be sure to check all of the documentation you receive to find out about the interest rate and also whether interest accrues while you are in school. If there is any doubt about how the interest policies affect the loan, ask for an estimated repayment schedule.
Benefits
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Short-term college loans are usually easier to get than other types of loans. Rather than needing to prove income or assets, students often can prove their enrollment in college to qualify. Loans dubbed "student" loans also usually are in deferment while students are in school and for three to six months afterward, meaning students do not have to worry about making payments while they are in school.
Warnings
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Getting short-term student loans usually is pretty easy. Loan companies assume students are getting loans that they will be able to repay with future employment. While that works out for many students, for others the payments for student loans can be more than they can handle. The general rule is that all student loans together should not add up to more than a student will make in the first year of employment at the prospective job.
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