Loans For Your Child's Education?

My son too can go to college just as I did even though today it costs 20 times as much as it did in my time. Why should he be robbed of a great future? Why should he suffer for my inability to earn handsomely? Why should he have to languish in poverty for my inability to play dirty? Switch on the TV and you shall find at least a couple of ads a minute showcasing education loans that promise salvation. But is this the answer to our questions?

I shall be honest with you, I do not have children of my own but if I did, I would sure as hell be inclined to signing on the dotted line of one of these insurance documents just fantasizing of my child's travel to the States for an Ivy league degree. This thought compelled me to challenge these documents on the grounds of their authenticity. I mean no businessman will give away money for free without extracting a handsome return, right?

Could it really be that someone out there is willing to sponsor somebody else's child's education as a social cause? I think so not. Here is the punch line - "Education loans are the biggest profit makers for an insurance company". How? Well that's easy, not only does this insurance tie you to the contract but your child too. Fail to pay and both you and your child are held liable to charges and further actions.

Secondly, by signing these contracts you have to keep collateral in the event that you or your child are unable to clear the debts. Consider this: your child fails to complete his or her degree, you are retired (happily) - in short your property or anything else that you kept collateral is now a collateral damage to you.

Thirdly, you may take only a few thousand as loan but your child will pay back at least 15% extra meaning another thousand or so over the principal amount. Higher the loan greater is the interest rate. What if your child is into a course that does not provide good living upon graduation, what if he has not got enough to pay off the interest every month? Well, you guessed it, he and you are going to suffer for it.

My reason for penning down my thoughts on education loans in such a manner is not to dissuade you from taking a loan for your child's future but to read the fine print and plan well ahead into the future taking all contingencies into consideration before you sign on the dotted line. Like the old saying goes, "Better safe than sorry".

In the process of setting up a blog page for all my new readers to directly follow my thoughts on the world wide web. Stay tuned... :)