Get a loan, Go to college

Are Student Loans Worth It?

So you want to go to college (or grad school or another educational institution). With the costs of higher education going nowhere but up, many education-seeking people are asking themselves: are student loans really worth it?

It’s an important question. And the answer changes depending on who you ask and what they’re trying to accomplish through their education. We can’t give you a definitive yes or no, but we can break down the facts and figures surrounding higher education, student loans, and the job market.

Is College Worth It?

Generally speaking, the research shows that having a bachelor’s degree (over an associate’s degree or a high school diploma) does increase your earning potential. And a master’s degree will earn you even more. There’s little question that higher education does help you get better-paying jobs.

But taking out student loans to get that higher education complicates things. After all, there’s no guarantee your post-college job will pay you enough to pay off the student loans. However, there are some instances when taking out student loans might be the right choice:

The Bachelor’s Degree

In many fields, the benefits of having a bachelor’s degree outweigh the cons of taking out student loans. The data shows that you’ll earn a lot more money over your lifetime with a bachelor’s degree than a high school diploma. We’re talking over $1 million more. Even with those numbers in mind, you should still be very cautious when taking out loans. Always look for grants, scholarships, or work-study programs over loans. If you must take out loans, go with federal. Federal loans often have lower interest rates and more repayment plans than private loans.

The Marketable Major

If you’ve got the passion and the talent to go into a lucrative, marketable field, but you need an education first, student loans might be worth it. When taking out loans, you need to make sure you’ll earn enough in your field to pay them back. Fields like computer science, engineering, and medicine often have higher salaries than careers in the humanities or in education. However, there are federal loan forgiveness programs for some educators or people working in public service.

The Manageable Loan

A student loan is a big, long commitment. You’ll need to make sure that, for years after your education, you’re able to make those loan payments. Taking out a small loan with a low interest rate may be worth it if it gets you the education you need to succeed in your career path. Even loans that seem small, though, build over time, so make sure you take interest and inflated cost-of-living into account.

The Bottom Line

There are lots of reasons a loan may (or may not) be right for you. Generally speaking, you should opt for public student loans over private student loans. And opting for a school you can afford—even if it might not be your dream school—is probably better for your future in the long-run.

So are student loans worth it? It depends. We can’t make that decision for you. But we can help you make the decision an informed one. Godspeed, fellow learners. For more information about student loan options, visit the Federal Student Aid website.