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  • Rei Pham

Why You Really Shouldn’t Be Scared of Student Loans

Coming from a Vietnamese household, my parents have always told me to never borrow money or take out loans as Vietnam is a cash society. My parents work twice as hard, double shifts, or even during weekends and holidays to make sure I don’t need to borrow money for school. I never fully understood student loans because I never took the time to learn more about them.

My parents discouraged me from taking out loans because movies tend to show loan services as gang-affiliated. It was not until I started working for my university’s Office of Admissions that I learned about the different types of loans available and their benefits. I learned federal student loans are not as scary as I thought. Of course, abuses of student loans by private colleges are still common. However, federal student loans are generally clear about their terms and policies and are not as sketchy.

1. Student loans are there to HELP you

Remember, student aids were created not to harm you, but to help you. Attaining a higher education is expensive and money should not be a factor when deciding on a higher education. Loans are not intended to harm you as long as you read and understand the terms and conditions. It is a great way to do what you love. Many corporations started out by borrowing money. Investing in yourself is similar to investing in a business. Investing in your college education could be viewed in a similar way. More college students to take out loans for college than you may think.

2. Subsidized vs. Unsubsidized Loans

There are two popular types of loans: subsidized and unsubsidized. Click HERE to be redirected to a great website that will clearly explain the difference.

3. Borrow in moderation

Know of the phrase “eat in moderation”? The same applies here. Only borrow the amount you need. My Vietnamese calculus teacher in high school taught me to borrow the whole amount offered and use that to invest. But what do I know about investing at 18 years old? And how sure are you that you won't touch that money to spend it on a new Michael Kors purse? It is tempting to have more money than needed, it always makes us feel secure; however, to save yourself from accidentally spending more than you could pay back, only borrow what you need.

4. Make plans to pay it back

Once you borrow something, you should always give it back. The more you borrow, the longer it will take to pay it back. So borrow in moderation. It’s helpful to plan out how much you plan to pay back every month right after graduation. This way, you will know exactly when you be done paying off the loan. It will also motivate you to work harder.

From this article, I hope you find student loans are not as scary as we make it out to be. Please note I am referring to federal student loans and my advice may not be as applicable towards private student loans. If you still have questions, I highly encourage you check out this Student Aid website to see if they have more answers to your questions!

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Rei Pham


Rei is a Psychology student at the University of California, Merced. As a Vietnamese immigrant, she understands the challenge of balancing both Vietnamese and American cultures. She is passionate about equality for minorities and wants to introduce the world of possibilities for first generation Vietnamese-Americans. Rei hopes to inspire the youth by sharing her stories in obtaining higher education and the resources available for them to achieve their own success.

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