4 Reasons to Use Student Loans (even if you don’t need to)

Today I want to give you four reasons to consider taking that student loans even if you can afford not to.

One, if you have an investment that’s appreciating in the market, and you can beat the rate on that loan, you can let your money appreciate and then, when the loan comes due, pay it off with cheaper dollars later. Consult a financial planning professional.

Two, your student has no credit right now—not bad credit, just no credit. If you allow them to borrow some money—it doesn’t have to be a lot—they can then pay that money back and have a history of borrowing and paying, which will then allow them to enter adult life with a good credit score for all those important things you need a credit score for.

Three, it might be a good motivator for your student to tell them, “If you get good grades” or “If you graduate on time, I’ll pay off the loan, but if not, you’ll pay off the loan.” For some students that’s a good motivator, but for other students that can be like starting World War III, so pick your battles.

And fourth is it may be a good negotiating with your student: if your students wants a more expensive college, you could say, “Look, if you want the more expensive college, you’re going to borrow. But if you pick a less expensive college, you won’t have to borrow.”

Those are four important reasons why you might consider having your student take out student loans even if you can afford not to. If you have more questions, don’t hesitate to reach out to us at 732-556-8220. We are here to help.