Are student loans worth it?

Question

I found a great school, exactly what I am looking for, but the tuition is high. I would have to take out a loan for $20,000 possibly $25,000. Is it worth it?

Answer 1

Hmmm...it really depends. Are you saying it will cost you 20-25 thou for the year? Because if you are, let's think long term. Your first year might be in that range, but the second, third and fourth years are going to that much plus some (inflation). So, a low average after 4 years in college will leave you with about $100 thou of debt. Not to mention interest, which will be capitalized each quarter (added to your principal/orginal loan amount) and will not likely be lower than 6-7%.

So if you pay off the interest each quarter your final loan amount will still be about $100 thou. But how are you going to pay for the interest each quarter? On top of the other bills you have to pay (assuming your are not being supported by someone else).

When you graduate you have 6 months before you go into repayment on a student loan. At that time they send you a pay schedule for the next 25 years of your life. You can apply for reducing your monthly debt, but you are probably looking at upwards of $500 a month. Can you manage that at your perspective job? I can't.

So are they worth it? It depends on the amount. If the above scenario pans out for you, no way!! But if you are talking about reducing that yearly loan amount by applying for financial aid and scholarships then you might be getting to a more manageable amount.

I had a loan for $10,000 for my my first year in college. The 3 years were supported by a full scholarship and many hours waiting tables. I graduated 3 years ago and have just recently paid off my student loans (thanks again to many hours waiting tables outside of my full time job!). The only reason I paid it off was because the interest was killing me.

But my degree was worth it. Is yours?? That's your decision.

Answer 2

It depends on your projected earnings after graduation. The field and specialty you choose will affect your earnings, and if a college or advanced degree is required for advancement, then yes, the degree is worth it insofar as the improved earnings will offset the loan cost.

Find scholarships and grants first. Once you've exhausted those options, then and only then get a student loan. And I say this as an employee of a student loan company. Loans are AFTER the free money's gone.

Hope this helps!

Christopher S. Penn
Producer, the Financial Aid Podcast
Daily free financial aid internet radio, no iPod required
http://www.FinancialAidPodcast.com
FinancialAidPodcast [at] gmail [dot] com

Answer 3

Depends. Are you going to graduate from college and then go work at the bank anyway? Or are you going to actually use your degree? College isn't worth it for a lot of people who's dream job doesn't require a degree. So figure out what you want to do, and then figure out if it having a degree to do it with will result in enough extra money a month to pay off your loans.

Answer 4

First of all, congrats on your high aspirations! If you don't have the money to pay for it yourself, it is definitely worth it, because you'll get an education and chance for greater achievment in life.

My daughter did that. She took out a loan for $24,000 and chose the "interest only" option which means that for the duration of the time she in school full time, she only pays the interest on the loan, (which turns out to be about $200/month - she has a part time job to pay for that). Then when she graduates, she doesn't have to start paying on the actual loan amount for 48 months -- this gives the graduate time to find a job and become financially stable enough to pay the loan. Paying the interest off while you're in school (if you can) is the way to go...that way, you don't have a $50,000 loan to pay off after the interest has added up after all that time.

Answer 5

If its a federal loan then yes it is worth it.
Because when you graduate they are very easy on you, and the interest rate is usually low. You start paying the loan 6 months after your graduation date, if you don't have the money to pay the monthly payment, you can always call them and negotiate the payment amount with them, and they are very lenient. Other banks that give student loans, do a research before you get any of them.
Just incase you don’t know the site of the federal loans
www.fafsa.ed.gov/
Good luck

Answer 6

try to aim for grants/scholarships more... they are not to be paid back. its confusing sometimes, but just keep applying.

every big (and small) company you see (manufacturer, orgs, corps and groups also) all have grants and scholarships they hand out like candy.

heres a link with a HUGE amount of some available. some you will need to copy and paste into a new window. also, fastweb (take the time to fill it in) will search databases and get back to you with a list of scholarships you qualify for.

Also contact all mens, womens associations in your state, they almost always have grants & scholarships. What ever field you are going into, contact the orgs, associations etc for them; Also check with professional organizations related to your career interests, such as the American Bar Association or the American Medical Association. they also always have scholarships. Research and dig, call then write. Its all worth it.

OVER apply; it doesnt hurt to have too many, and the extra funds can help with housing.

http://www.angelfire.com/nj4/njcomputerchick/school.html

MORE:
http://www.myspace.com/financialaidpodcast
http://www.sfa.ufl.edu:16080/scholarshipcafe/
http://www.fafsaonline.com/
http://www.fafsa.ed.gov/
http://www.studentawards.com/
http://www.collegeanswer.com/index.jsp
http://www.studentscholarshipsearch.com/
http://www.studentscholarshipsearch.com/Detailed/Scholarships/Meta_indexes_and_other_scholarship_directories/Women_s_and_Non-traditional_students_scholarships_meta-directory_126.php
http://www.discovernursing.com/nursing-scholarship-search
http://bhpr.hrsa.gov/DSA/nsl.htm
http://www.nsna.org/foundation/
http://www.schoolsoup.com/
http://www.blackexcel.org/link4.htm
http://www.finaid.org/
http://www.rhodesscholar.org/
http://www.collegedata.com/
http://www.fastweb.com/
http://www.getreadyforcollege.org/gPg.cfm?pageID=139

STATUS of your gov loan or aid:
http://www.nslds.ed.gov/nslds_SA/

if you don’t have a PIN yet (for your loan / aid status) apply for one:
http://www.pin.ed.gov/PINWebApp/pinindex.jsp

ESSAY HELP
http://www.scholarshiphelp.org/
http://www.gradesaver.com/resources/scholarship.html
http://www.collegeadmissionsessays.com/
http://www.nataviguides.com/broke_essay.html
http://www.princetonreview.com/college/apply/articles/process/essayjump.asp
http://www.freschinfo.com/tips-brainstorming.php
http://www.freschinfo.com/tips-topic.php

Answer 7

If you found the school you are looking for the price is almost always worth it. Ask the school about graduation statistics and salary ranges if you want to feel more compfortable about starting the program.

It is great that you are aware of you potential debt before you start.

Answer 8

if that is the institue of learning you want to go too. Then yes it is worth it, ask yourself the question then make your decision accordingly my friend!

GOOD LUCK AND ENJOY YOUR TIME AT SCHOOL!

Answer 9

i used this site to lower my student loan. it's great! and all you have to do is fill out a simple form and they'll help you..