Loan Articles

The problematic job market today is exacerbated by the fact that loss of employment, or even reduced hours or a pay-cut, will almost always damage one’s credit. Bills are harder to pay, the income-to-debt ratio rapidly goes in a negative direction, and as much as we’d all like to do better, the sad fact is that very few of us have the recommended 6-9 months worth of living expenses in our savings account. A bank or credit card company may even change the terms of the agreement simply because there is less money going into an account every week. All of these things make the future look very grim.

Furthermore, there is no question that getting a new job is also harder because the technical knowledge required for all but the most basic jobs is increasing exponentially. Sometimes, the best way to gain new or more secure employment is to go back to school. There are a variety of institutions available, and most of these have programs geared toward helping non-traditional students gain new technical skills and other knowledge to improve their marketability and employment aspects.

Of course, going back to school with the intention of getting a new job that will improve one’s finances is a bit of a catch-22, in that it is probably going to cost money that the prospective student does not have. In this case, borrowing money through a student loan is a viable risk and a solid investment in the future. For someone looking to go or return to school, even someone with poor or bad credit, there are a range of options.

There are government and federal programs, usually with very low interest rates. There are also private options which may have higher rates, but may also be more rapidly acquired as a short-term solution. A government loan such as a Stafford loan is tied only to the borrower’s income, not to credit, though the way interest is compounded may be impacted.

Whether looking into a private loan, a government loan, or other federal program, it is important to research. The borrower should also be cognizant that this is debt, which will reflect on one’s credit report and stay on the record. However, at the same time, student loan debt is considered “good” debt, in that it is investment debt with the potential for a high return – a better job, more money back into the economy and so forth – rather than something like credit card debt, which will only reflect negatively in the future.