Getting through college isn’t easy. It isn’t cheap, either.
FinAid! (http://www.finaid.org/) a free and very comprehensive web resource indicates that student debt has increased 5.6% per year since 2003-2004. In 2007-2008, the average debt for a graduate from a your-year school was just over $23,000. Maybe more students are taking on debt because of the recession, or rising college costs, or simply because more people are coming to college overall. Maybe all of these things play a role. For whatever the reasons, student loans are part of life for a lot of people and the numbers are growing.
While job prospects are much better with an education beyond high school, reality is unpredictable. Borrowing money increases the salary needed to live comfortably while still meeting financial obligations, so there is a lot to consider before taking on this kind of debt. Just like any other loan, student loans must be repaid. Failure to repay leads to “default” status. Defaulting has serious consequences. It’s especially damaging to your credit score, which affects your ability to buy a car or a home, among other things. Defaulting can even lead to legal actions.
Ideally, it is best to pay for school without borrowing (or borrowing very little) but that involves having enough income to cover college costs in addition to any other life costs. Having minimal financial obligations apart from school is a big help. Financial help from family, savings, or scholarships can help, too.
Not everyone is fortunate enough to have financial help, though. People come to college at various life stages and under various circumstances. Plenty of people have to rely on themselves to pay for school. A part time job will only go so far. Even a full time job may not go very far, especially when other costs (rent, mortgage, car, food, utilities) are factored in. Often, the ability to borrow becomes the deciding factor in whether or not someone pursues college at all.
Are the benefits worth the financial risk? Some might actually say “no.” Some would say the only good option is to “pay as you go” even if that means taking one class at a time. Sure, that takes care of debt concerns, but it also adds significant time to completion of even a short program of study. If I hadn’t borrowed money for college, it could have taken me literally 10 years to finish a four-year degree. For me, that meant 10 years of being in a job that did not offer future potential. But now I live with loan payments and they affect many of the financial decisions I make. I would not trade my degree, but will be honest about the obligation that came with it.
To minimize the time and debt factor, many students work full time and attend school full time. They may still need to borrow, but not as much. However, this strategy has consequences, too. It can be extremely hard to keep up with course work. Grades may suffer. Family life and other obligations may suffer. It may become “too much” and result in stopping school entirely to regroup.
Ultimately, everyone has to weigh the risks and evaluate individual circumstances when considering whether, or how much, to borrow toward an education. If loans are deemed the only option, use them sparingly and consider any and all ways to minimize debt in the long run. There are many tangible and intangible benefits to going to college and I strongly believe everyone should have the opportunity if they choose it—even if it means borrowing. However, the cost of an education can become a burden if not financed wisely.
