Stepney says students who default on their loans are reported to the credit bureau, and the notation can remain on their credit report for years. Since it's on their record it could inhibit them getting a loan for a home, car or other purchase. Although a student has six months after they finish school to start repaying their student loan, they can start paying on their loan as soon as they like, says Stepney. Also, to avoid a student loan debt, there are other alternatives for paying for school. There is all kind of free money out there.
Work study is one alternative.
Students are allowed to work for USM and use their wages to help pay any previous student loans and current expenses for school. Scholarships and community service are other alternatives for paying for school. For some students, student loans are their only option. They may not quite meet the requirements for scholarships or have time for community service and they may already have a job. In this case, student loans are beneficial as long as they are not abused, says Stepney.