Q: Are student loans different from other type of loans, like a car loan for example, and will student loans show up on my credit report?
A: Student loans are treated fairly similar to all other types of loans, especially where credit is concerned. As with auto loans and/or home loans, borrowers are held responsible for the amount they borrow, and will have to repay that amount plus interest (in most cases), no matter what. Student loans will show up on an individuals credit report, and as with any other type of debt, failure to make payments will negatively impact your credit profile. Similar to most other types of loans, borrowers can not get out of repaying a student loan, simply because their financial circumstances become difficult. In some cases, certain student loans are even held to a higher standard than most other types of loans. For example, if an individual qualifies for bankruptcy, their private student loan debt is often the only debt not eligible for discharge. It is extremely difficult to have private student loans discharged in bankruptcy.
As with any other type of debt you are considering taking on, you need to do your research and weigh the benefits carefully. Student loan debt, will likely be with your for years after you complete your college education, so making certain you take on the least expensive type of student loans (if you need student loans) will be important. Most financial aid experts will recommend that a student never takes on more student loan debt than they plan to make the their first year in the work force after college graduation. So, for example, if your chosen career filed will have you earning $35k per year, your total accumulated student loan debt should be no more than $35k.