Starting with the loan research process, parents can teach their children the importance of finding the right loan. Concepts to be discussed include interest rates, repayment schedules and the consequences of defaulting on a loan. While students might not have to deal with repayments until several years down the road, it is critical they understand the process and what will be expected of them after graduation.
Students also need to learn how loans will affect their overall financial life. Missing payments or defaulting on an entire loan can set the stage for credit problems for years to come. Because many students struggle to find a good paying job upon graduation, they will need to prepare for making the loan repayments early to ensure they have the cash to take care of their financial obligations.
Other factors concerning loans should also be covered. Many loans and financial aid offer students a break until they can get more financially stable after graduation. Students need to understand what their options are for loan repayments, consolidation and forbearance requests.
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