Is College Worth The Cost Of Student Loans?

One of the debates going on right now, thanks to the recession and the rising cost of college, is whether or not your degree is worth the money.

Earlier this year, outstanding student loan debt surpassed credit card debt. Rising levels of college debt, combined with a tough job market, have many questioning the cost of college. According to the COUNTRY Financial Security Index, 26% of those surveyed feel that college is no longer a good financial investment. This represents a drop from 81% to 58% of people feeling college is a good investment.

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Not only are more people questioning the value of college, more expect that students will help bear more of the burden. 46% of those surveyed said that they put their own retirement savings ahead of paying for a child’s college experience. 78% of Americans think that college students should work part-time to help pay for college. And, of course, most people accept that student loans are likely to play a big part in covering college costs, especially if college savings and scholarships don’t amount to enough to pay for university.

College Costs

What Makes College Worth the Cost?

When deciding whether or not college is worth the cost, there are different factors to consider. Some of them have to do with financial trade-offs, and other considerations are more about the experience, and some of the more intangible benefits. Here some of the things to think about as you consider whether or not college is worth it:

  • Do you prefer a trade or professional certification?: In some cases, you might be better off attending a trade school or getting a professional certification. Not everyone enjoys college, and not everyone needs a degree in order to succeed. If you can make money as a dental hygienist, radiology tech, mechanic, or with some other profession, and you think you would enjoy it more, it might be worth it to consider going that route.
  • Is it reasonable to assume you will make enough money when you graduate?: Your next task is to determine whether or not you will be able to afford to repay your student loans when you are done with school. Is the major you are choosing likely to allow you to repay your student loans? Part of that consideration is the school you go to. For example, will you go to a traditional university or an online school like Phoenix University? For undergrad, I went to a small state school. It was inexpensive (especially with a scholarship), and I did well. I attended a more expensive private school for my Masters (Vs. getting an online mba). My current profession allows me to easily keep up with student loan payments.  Consider the costs, and whether you will be able to repay them.
  • What experiences will you have?: In many cases, the value of your college education boils down to what you make of it. If you take the time to get involved in resume builders and network with others, this can add a layer of value to time spent in college. You can’t put a price on the value of experience, connections and opportunities to grow. If you are willing to go a little off the beaten path to make your college experience a useful one, it might be worth the price you pay.
In the end, you have to decide whether or not college can help you meet your career and income goals. If you find that college is worth the cost of student loans, and you can keep your borrowing prudently under control, you might come out ahead in the end.
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Miranda is a freelance writer and professional blogger. She writes for a number of personal finance blogs, including Planting Money Seeds. She has a M.A. in journalism, and is the author of Confessions of a Professional Blogger. Miranda lives Utah, where she enjoys spending her free time reading, traveling and playing with her son and husband.

Last Edited: 25th July 2011


    Share Your Thoughts:

  1. says

    It absolutely depends upon the intentions and goals that are associated with the college degree. If it is a stepping stone to a field that is in high demand and that commands a decent wage, then yes. If it is solely for something to do after high school, then probably not. Some planning needs to be involved.

  2. says

    More education on finances needs to be mandatory in high school. If schools offered a course on managing finances, alternatives to student loans, how to manage student loans, etc. fewer students would be straddled with excessive student loan debt. I also agree that the student debt ratio to starting salary in a specific field should be kept kept at a 1:2 basis (debt should be equal to half the starting year’s salary).

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