Student Loans

Borrowing money for students is normal nowadays. This can be evidenced from the survey Higher Education Leadership and Management (HELM) of 2,000 students at 71 universities. The results revealed the source of income for the majority of students were their parents (88.16 percent) and scholarship (4.60 percent).


Students themselves are well aware that their college fund is not necessarily derived just from their parents. There are times when they have to borrow extra money to another party in order to pay off tuition costs.  The survey showed parents had to borrow from relatives (32 percent), banks (28 percent), and Mortgage Brokers (13 percent).


Students are often uncomfortable with this. They want to be independent and do not want to burden the financial problem onto parents. This has been noticed by the government. In the past there was no such thing as Student Credit Indonesia (KMI). This credit can only be disbursed when the student has completed their studies and must be repaid after graduation. Unfortunately, KMI was lasting longer because many students were in arrears with their repayments.


KMI’s problem was not that the government shut down the opportunity for student loans. The rights of students to get a loan were even reinforced in the Higher Education Act No. 12/2012. In the Law, Article 76 mandates the rights of students were done in three ways: scholarships, educational fee waivers, and interest-free loans. These were to be repaid after graduation, or when they got their first job.


The goal were clear. Loans without interest for these students were required for students not to drop out due to economic problems. Banks stated their own willingness to offer student education loans. Conditions on interest-free credit thought that there should be legal protection jointly by the Ministry of Education and Culture, Ministry of Finance, and Banking.


The other way is applying for a loan to the bank. Some campuses in Indonesia have formed a partnership with a bank in this matter. Call it the Gadjah Mada University (UGM) with one of the banks in Indonesia, which initiated a student credit card. But the target of this credit card is a S2 student or students working primarily. The function of the credit card itself as a bailout is later paid back by the students.


Many look for the source of their own income through other jobs without the need to depend on the parents or incurr debt.


Many have shown to be successful examples at small businesses since attending college. These include laundry services targeting your own friends. Culinary business is also interesting but needs capital and expertise. For those who are proficient in English language, perhaps start a  translation service. Selling goods through online or conventional ways can also be tried.


If no other options seem available to you, try to find a loan provider that is best for your needs. But remember, always compare and do not take the first option you find.


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