Are Student Loans Worth The Debt?

Are student loans worth the debt? The answer—it depends. How much debt will you go into? For what are you going into debt? How fast do you plan on paying them off? Is the degree you are going broke for going to overcompensate for your debt? All of these are important questions to ask before diving headfirst into the seemingly bottomless pit that is student debt.

According to American Student Assistance nearly 12 million of the 20 million Americans attending college each year take out student loans. And as of 2012, there is between $900 billion and $1 trillion in outstanding student debt in the US. And from Business Insider college tuition has increased by over 400% since 1982 (yet medical care has only increased by 200%), even though college students typically spend less than 30 hours a week on their studies.

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How can we avoid student debt? Well, honestly, sometimes you can’t. Especially those entering graduate and doctorate programs; not many people have that kind of cash to throw around. The plus side of going into debt for such programs is that typically the payout can be very high and often companies will pay for part of the loans for their new employee. American Student Assistance continues from above that as of 2012, only 700,000 students that took out loans enrolled in the US Department of Education Income-Based Repayment program, which helps those with high debt relative to their income by giving them lower monthly payments.

Are Student Loans Worth The Debt

Another option is student loan consolidation. Basically, for those with multiple student loans, a person can combine their loans into one loan. The benefit to this is that it would give you one monthly payment and one interest rate, potentially a lower rate at that! One can attempt to negotiate the terms of their consolidation themselves, or through a service. It is recommended that you review services online before making the choice for you.

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A nearly surefire way to keep student debt under control  is to make sure that the degree you are pursuing is what you will want to do for the rest of your life and that the cost of students loans doesn’t outweigh the benefits of your post-college salary. Too many people go into school and change their direction countless times. I’m not saying this is necessarily a bad thing, just be careful. But don’t go into something that you don’t want to be in for the rest of your working life. I hear all time about people going into cosmetology school, $25,000 plus of debt, and never use their license! What nonsense! And around 40% of psychology students will pursue business, law, or some other advanced degree instead of an advanced psychology degree. So just don’t take out loans for something you might not fully pursue after school.

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But the absolute best way to stay out of student debt it to start saving early and be smart with your money.

So again I ask, is it worth it? You’ll have to answer that one for yourself.

Frank McCourt is currently solvingt he world banking crisis. He’ll return your calls soon.