In the midst of the current student loan crisis, with the cost of a college education on the rise, many students may be asking themselves “Is college worth the debt?”
Student loan debt is the second-largest debt category in the United States, second only to mortgage debt. With the total US Student Loan Debt reaching $1.52 trillion, most graduates are paying approximately $400 a month to repay their student loans.
We have surveyed real people who have paid off their education loans, and they are sharing their student loan stories to shed some light on answering the big question: Should I take a student loan? Here are some ideas and insights from those who have paid off their student loan debt and what they would do if they had the chance to try it all again.
When you decide to take out a student loan, you are investing in yourself and in your education. Derek Sall, creator of Life And My Finances, thinks planning it out could help those on the fence decide the right path for them.
“I did have student loan debt – $12,000 coming out of college. But you know what? If I had to fight to pay for college on my own without student debt, I probably would have been better off. At the very least, I think kids today should put together a business plan of what degree they’re going for, what they’re going to do for work once they get it, and how long (realistically) it would take for them to pay off their debts. If their plan isn’t realistic, they don’t get into school (or they don’t get their loan). Loans are just too easy to get today – it’s hurting more people than it’s helping.”
Many students are blindsided by the cost of repayment, treating your investment like a business is a smart and savvy way to be one step ahead. Will your career path allow you to afford the payment on the amount of student debt you owe?
If the answer is no, perhaps borrowing money for your higher education isn’t the best idea financially. However, like Derek says, fighting for your college education and paying for it on your own will not only earn you that degree but allow you to graduate debt free!
Maureen Campaiola, founder of A Mess Free Life suggests taking the time to discover your dreams and passions before tackling your college education may be the key to success. The answer to the question “is student loan debt worth it?” isn’t one size fits all, but pertains more directly to what your career aspirations may be.
Maureen Campaiola (@debtfreeforme):
“Back when I took out my student loans the work environment and the cost of education was a lot less than today. If faced with the same decision would I still take out student loans?
Yes and no.
Yes, I’d take a loan out if my future aspirations required me to have a degree. For example, if I want to be a Social Worker, I need a Masters. Can’t be one without it. So, if that was my true calling and passion, I would definitely take the loan but I would do it with a plan, something I never thought of prior to signing for my loans.
The real issue is knowing what your true passion and calling are, and that’s a hard call when you’re 18 or 20 years old and you’re not sure what you want to do with the rest of your life.
If I was a student today faced with the question of going to college and taking out a student loan, I would wait until it was clear to me how a loan would actually help me reach my overall life goals. I would maybe start with attending community college and getting a feel for different subject matters. I would explore other options like trades or self-employment before I committed to loans that will take years, even with the best plan to pay off.
Once you feel you have a solid idea of where you want to be in life, from there you’ll have the resources you need to make a decision about whether taking a student loan and getting a degree is right for you. Don’t rush the process. Take your time and maybe you’ll discover getting a college education and incurring a massive amount of student loan debt is the wrong choice for you.”
Chris, creator of Money Savvy Mindset found himself with over $100,000 worth of student debt when he graduated, and has since completely paid it off. Even after tackling that amount of debt, he still believes student loans can be beneficial to borrowers, if they meet these stipulations and follow these guidelines:
“I think it is definitely worth taking a student loan to get a degree if the potential borrower hits these 4 conditions.
For many, attending a university and living on campus is a right of passage. But this right of passage comes with a pretty hefty price tag. Ashley Patrick, founder of Budgets Made Easy paid off $25,000 in student loan debt in just 10 months. But as she reflects back on her collegiate experience she encourages others to identify if they truly need their degree to pursue their passions!
Ashley Patrick (@budgetsmadeeasy):
“I think that for most people getting a degree is not worth it. The majority of people are saddled with thousands of dollars in debt for either a degree they won’t use or for a market that will not pay them enough to make the payments on the loans.
Now obviously some jobs require a degree and are worth it. It depends on what you want to do. If you are not sure what you want to do, do not go to college just because everyone else is doing it. Learn a skill and make real money instead of taking on tens of thousands of dollars in debt for a degree you can’t afford and likely won’t even use.”
“What are your goals?”
This is the question posed by Mike Monfredi, CEO of MikedUp Blog.
Mike Monfredi (@RealMikedUp):
“Do you want to become a doctor, lawyer, accountant, or other professional who would require the degree and thus the debt that comes with it? Or would you rather create a company or work a trade that can pay very well and would not require the degree? Define your end goal to inform your decision about whether the degree, and the debt, are worth it.”
Many peoples’ dream jobs are better suited by attending a trade school, which can be less expensive and get you working quicker than a traditional four-year university. Determining if college is worth the debt boils down to what you want to do!
Jen Smith from Modern Frugality has developed a passion for minimalism and spending less after paying off her student loan debt, but she believes there are ways to effectively minimize how much you need to borrow to earn that college degree:
Jen Smith (@modernfrugality):
“For some people, it is worth taking out a student loan to get a degree. But many students take for granted the time they have to work, save, and apply for scholarships. Students also assume they have to attend all four years at a university when in reality you can save a lot of money by getting your AA at a community or local college. I think every effort should be made to pay for college yourself or through scholarships and if there is excess tuition not covered by it, a small loan to cover the rest is perfectly reasonable.”
Signing on those loans now might sound easy, and applying for grants and scholarships will be long and grueling, but minimizing the amount borrowed will cut back on accrued interest, and allow you to pay off your debt quicker in the long run.
Many do not have the average $34,000 it costs to pay for a four year university on hand. When a student decides to go to college, for most, applying for a student loan is the next logical step. However, Tim Stobierski, founder of Student Debt Warriors suggests evaluating the impact of borrowing from a financial aspect:
Tim Stobierski (@TendreCroppes):
“A lot of students want a definitive answer as to whether or not taking out student loans to earn a degree makes sense. Unfortunately, there is no definitive answer. What makes sense for one person may not make sense for you. Ultimately, you need to do what is best for your unique financial situation.
When considering whether or not to take out student loans, it’s important to weigh all of your pros and cons. Student loans can help you afford college when you have no other options, but they can also mean paying tens of thousands of dollars in interest over the life of the loan. Only you can decide whether or not that tradeoff is worth it.”
Student loans can be a drawback, but on the adverse side of this, they have helped many students achieve their career aspirations that would have been otherwise impossible due to financial circumstances.
Believing in yourself, and educating yourself on what student loans really cost you is the best way to be sure you’re ready to take that leap. There are so many resources available, take advantage of getting a personal loan online and shop around for the best rates, be fully aware of the terms of your loan post-graduation, and don’t be afraid to ask questions.
Even if it takes you a little longer to obtain your degree because you’re working to pay for college out of pocket, you’re doing it! Any type of education is a smart and good investment in your future, and all good things take time.
A decision to take out a mortgage on a home, or a loan for an automobile are ones that are given careful consideration in respect of monthly payments, interest, and loan terms, be financially responsible and treat borrowing education loans this same way!
We bring our words of appreciation to Derek Sall, Maureen Campaiola, Ashley Patrick, Chris, Mike Monfredi, Jen Smith, Tim Stobierski. Thank you for your responsiveness and contribution to this post!
Being an entrepreneur at heart and a digital strategist at work, Rich Evans became a valuable author with over 20 years of experience. His academic background from the University of Nevada serves as sound basis for developing strategies from a scratch. An active lifestyle is a part of his personality, and this also determines him to accept challenges and achieve goals. Along with being a consultant for several magazines and websites, he also runs his own blog – www.Rich-Evans.net.