Student loans have a bad reputation because they can potentially ruin a person’s finances. Student loan debt has tripled within the past decade. They have made it difficult for people to get a home. They have also caused more people to opt out of going to grad school. However, a new study has cited the benefits of getting student loans.
The five-year study involved 20,000 students who lived in an urban community. The study found that students who took out a student loan of $4,000 were able to work less and get better grades. They also had a better cushion for emergency situations. People do not have to pay back student loans while they are in school.
Benjamin Marx is an economist who works for the University of Illinois. He stated that student loans can make it easier for people to handle unexpected issues. He was also one of the study authors. Dr. Marx and his team kept track of 10,000 students who had received a financial aid reward letter and 10,000 students who did not receive a financial aid reward letter.
The study showed that students who had received a letter were 40 percent more likely to take out a loan. They also found that students who had student loans had a grade point average that was 0.5 point average higher than students who did not have student loans. They were also 178 percent more likely to transfer to a four-year university.
Lesley Turner is an economist who works at the University of Maryland. She stated that people often think about the burden of student loan debt. They do not think about how student loans have changed their lives.
Darin Davis is a 21-year-old freshman at Harold Washington Community College. He is happy that he took a $1,000 loan. He is now able to work 20 hours a week instead of full-time. This gives him time to focus on his studies.
However, there are still people who want to avoid student loan debt. Catlin Rock is a 28-year-old student who is also a single mother. She works at a pizza place because she does not want to get in debt.