It is no secret that student debt has had a huge impact on millions of Americans. Many former students will tell you that going to college was their biggest regret in life.
Sadly, college students often find that student loans are essential to paying for college. Even when debt is unavoidable, some steps can be taken to make sure it doesn’t get out of control.
How Student Loans Became Essential and Dangerous
There was once a time where attending college was a one-way ticket to a comfortable middle-class life at the minimum. A summer job could nearly pay off the following year’s tuition, and student debt was minimal. This era ended more than a generation ago.
Today, college is significantly more expensive. Many recent graduates find themselves looking at debt that will take 30 years or longer to pay off. Another significant change in the college landscape has been the changes in bankruptcy law. Student debt used to be treated like credit card debt or mortgage debt in bankruptcy… borrowers who got in over their heads had the option of a fresh start. Gradual changes in the bankruptcy law have taken us to the point where student loans are now nearly impossible to discharge in bankruptcy. It makes college mistakes that much more permanent.
However, just because college can be a mistake, it does not mean that it is always a mistake. For many, the choice to go to college was still a good decision. A college degree has never been more important in the job market. Even at its inflated price, it is still a good investment in many circumstances.
The tricky part about the college decision is that it is no longer an obvious choice. There are major landmines that have to be avoided.
Identifying the Expensive Potential Mistakes
Not finishing college – The most devastating mistake a college student can make would be to start a degree but not finish it. Most employers only care if you have a degree; part of a degree does not get partial credit. Leaving college without a degree means you do not have access to the higher-paying jobs that come with a college degree, but you are stuck with the same crippling student loans. If you are going to go to college, you must be committed to seeing it through. If you are not confident that you will, starting at a community college with an associate’s program is a less expensive way to investigate your higher education potential. Many of these credits can be transferred to a four-year college if you eventually decide to go that route.
Picking the wrong college – There is a huge gap in education quality from school to school, and the most expensive schools are not necessarily the best. Over the last few years, we have seen many lawsuits involving for-profit colleges that were accused of misleading their students about employment statistics. Other times a local state school and a local private school have equivalent reputations within the community. Why pay extra for a degree that is essentially the same?
Picking the wrong major – All college degrees are not the same. Some schools can have excellent programs of study in one field, but poor programs in another. Rather than identifying an area of study you feel passionate about, we suggest looking at jobs that you might want. Learn about future employment opportunities in your field of choice. Study the schools that are highly regarded in that field. Pursuing a degree because you like certain classes can be a mistake. You don’t have to decide as soon as you start school, but it should be something you put a lot of time and effort into figuring out.
Borrowing too much – No matter where you end up going to school, this is a mistake that everyone can make. There are also lots of ways to borrow too much. You can borrow too much because you failed to put the time and effort into scholarship applications. You can borrow too much by living an expensive lifestyle during school. (hint: just because your friends are going out to eat every night or traveling extensively does not mean it is a good idea for you). The money you get during college is very easy to acquire, but very hard to pay back. Every penny that you can save during your college years will make a huge difference once you get out of school.
College is still a good idea for many people. The life experiences and education can absolutely be worth every penny. However, it isn’t the slam dunk it used to be. Careful planning with an eye towards the future is essential if you don’t want to regret your higher education decisions.