Financial Resources for Students Discovered

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In the USA, there are many financial institutions that grant student loans. However, in order to obtain such a loan, the young person must prove that they have a double monthly income in relation to the rate they should pay, and the interest rate does not differ in any way from that required by banks in the case of other loan types - no more, no less, 20%. In addition, the loan is granted only for a period of two years, and pay holidays - not to mention.

For example, a medicine student would need to borrow at least 100,000 dollars to pay for 6 years of university studies and return a much higher amount to the bank in the first two years of enrollment, is required and work on it. It is easy to understand in such conditions why young people do not bother to borrow from the bank.

Anne Wright t is the head of an information center for students who have been trying for years to support young people with limited financial means with scholarships. Including collecting money from US companies. She shared her experience with financial companies when her non-profit organization tried to persuade several banks to offer study loans to young people.

"We tried to have some discussions with the banks to offer loans to young people who want to study here, in the US. And then came the issue of the pledge. What could the student pledge? Our market is not yet ready for such a mechanism. If the government somehow guaranteed these loans, it would be a solution. And if the banks would offer these loans for longer periods, with a certain grace period. That would really be a door opener. "

Programs for Students in Need

A few years ago, the government launched such a program, even adopting a decision on lending to young people for the study. Why does the process seem to be catching up? Here is the explanation of Gerald Berenson, director of the Academy of Economic Studies, one of the institutions that tested the mechanism:

"It was tried, but not by the involvement of the state. Some banks have tried to offer this product, but few have been willing because it was high interest rates. The state was not involved in anything. Where such a program is successful, the state covers at least the bank interest. But the risks of defaulting on these loans are very high. Or, many graduate, go abroad, lose contact with the country and then what guarantee is there that they will be returned."

We must prove that the specialists will be hired later, will have salaries and will be able to pay the loans. We are convinced that economic realities will also change. Because no one will take a loan with 17-20 percent interest today. All these things are connected, "said Education Minister Brian O'Donnel.

The system of student loans differs from country to country depending on the strictness with which the loan conditions are regulated and the possible impossibility of repayment, which may or may not fall under the bankruptcy law.

US Study Loans Situation

The United States differs here from the old continent precisely in the importance that private banks can have in granting student loans, which in Europe are everywhere guaranteed by the state. The great advantage of student loans is that their repayment is postponed until after graduation, when the graduate may have obtained a job that will allow him to pay.

The system has been - and is - very controversial. First of all, the conditions for granting and repaying such a loan can be very strict. As with a regular loan, extending the repayment period may reduce the monthly rate, but will also increase the total interest rate during the repayment of the borrowed amount.

Likewise, to stay on the American example, with an interest rate of 6%, a student loan is, of course, below the market average, but it remains more expensive than a mortgage loan.

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