When paying for college, there are two alternatives to getting student loans. The first is using scholarships, programs from your workplace, and savings to pay for college up front and as you go. The second is agreeing to pay your school directly at a later date.
Initially, the second option sounds more attractive than student loans. Why go through the stress and complexity of getting loans, perhaps from different companies, when you can work with the school itself?
This e-mail to GetOutofDebt.org shows why owing the school directly can go horribly wrong.
The writer is stuck in a tough situation. Her school won’t release the diploma until she pays for her entire degree. But, apparently, in order to get a job in her field (nursing) she needs the school to release the diploma. Otherwise, she’ll be stuck working in another field, or taking a much lower-paying related job.
I’m not sure how important having a physical diploma is to getting a nursing job–I know that no one has asked to see mine for any jobs so far. I also don’t know if her school would confirm her degree without the full repayment. I left a few suggestions for how she might be able to explain her situation, but it depends on the hospital or employer. After all, medicine is a field that should have higher standards than most for making sure people are properly educated and trained.
So what should one do in a situation like this?
Student loans definitely suck, but there are better and worse people (or organizations) to owe money. It turns out that student loan companies aren’t actually the worst. So before agreeing to pay your college after you graduate, be sure that upon graduation you’ll have all the necessary tools to be in a position to pay them back.
In the writer’s case, I think it’s in the school’s best interest to work with her so that she can get her diploma. If they won’t, it’s possible she can get student loans to pay them off–though it’ll be harder than if she were still attending the school.
So remember when taking on loans for anything. It’s not just what you owe and at what interest rate. Who you owe also matters–which credit card company, which organization, etc.