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Student Loan Debt: Is College Worth the Cost?


As high school students prepare for college, many are wondering if they should go to college at all. Statistics have long shown college graduates earn more than those with lower levels of education. But the answer to the question of whether high education pays off has been posed far more frequently in recent years as student debt rises to higher rates than ever. It can be a lot of money to invest in your education, so it's good to know whether or not you're making a good investment when you pay the cost for college.

First Things First: FAFSA Deadlines

As the prospect of college grows closer, it's important to assess all the sources of available funding to cover college costs, including savings, family income, grants, and scholarships (Click HERE to check out some places to look for scholarships!) For example, if you plan on attending college for the upcoming summer or spring semester, you should file the Free Application for Federal Student Aid (FAFSA).

The FAFSA deadline approaches quickly on June 30th every year, so be sure to file as soon as possible so that you're eligible for financial aid. You should also spend time shopping around for the best loan terms and interest rates, if you need to borrow money for college tuition.

Whether or not you get financial aid, student loans are always an option. The average recent 2016 college graduate is projected to have $37,000 in student loan debt, according to Mark Kantrowitz publisher of Cappex.com. That's a lot of debt to take on as a student. So, how can potential, or even current, students decide whether or not college is really worth the cost?

A GOBankingRates analysis of high-paying occupations offered some insight. Although the answer is so clear, the study showed college is a requirement for the vast majority of the best-paying jobs on the list. Here are five reasons getting a college education can be worth all of that student loan debt.

1. Many Jobs Still Require a Degree

  • The first reason is the most obvious: A college degree is still required for many jobs. Although the idea of racking up thousands of dollars in debt can be daunting, consider the fact that all but six of the 45 jobs in the GOBanksRates survey with average salaries higher than $51,500 required a bachelor's. A college degree is mandatory for many occupations in industries including engineering, finance, and education.

  • If you invest the time and money it takes to earn a bachelor's degree, you'll, more often than not, reap the rewards in the long run.

2. Some College is Better Than None

  • "Depending on what a student wants to do with their career, it may be possible to accomplish the same goals without the expense of a four-year college education," said Andrea Feirstein, college savings expert and founder of AKF Consulting Group.

  • Indeed, some jobs with substantial salaries don't require a bachelor's degree--you can aim for a two-year associate's degree instead, allowing you to spend less on tuition. Professionals including air traffic controllers, radiation therapists, dental hygienists, web developers, building inspectors and electricians all earn average salaries of more than $51,500, with air traffic controllers making more than double that benchmark. Likewise, paralegals, flight attendants, and carpenters can earn respectable annual salaries of more than $40,000, which puts them on par with many college-educated peers.

  • Savvy students could also enroll in a community college option (click HERE for Virginia Western's website!) for the first two years, with the goal of transferring to a more expensive public or private college for the final two years. "The lower the price of that education, whether by averaging down what you pay or by maximizing savings and other sources, or minimizing the degree to which one uses student loans, the more likely it is that college will pay off in the end," Feirstein said.

3. Make Enough to Pay Off Loans

  • If you decide to go to college and take on the average debt loan of $37,172 to finish a four-year degree, you might be wondering how much you need to earn to make college worth the cost. One measure is being able to pay off student loans quickly and without breaking the bank.

  • Assuming the average student loan debt has a 6.8% interest rate over a term of 10 years, a graduate would need to earn a salary of $51,333.60 to pay off the average debt load if they devoted 10% of their gross monthly income to payments.

  • That means, for example, that marketing managers, financial managers, benefits managers, and construction managers all earn more than enough to comfortably repay student loans without devoting more than 10% of their monthly income to covering college costs, according to the Bureau of Labor Statistics. And aerospace engineers, chemical engineers, biomedical engineers, mechanical engineers and even K-12 teachers, among others, earn enough.

  • Often, college costs make sense for many students who opt for less lucrative professions, too. Professionals earning an annual median of $34,222.40 could pay off their student debt in a decade if they were able to devote 15% of their gross monthly income to loan payments. For example, interior designers, graphic designers, athletic trainers, social workers, and substance abuse counselors all make enough to pay off the average debt load if they are willing to devote a little more of their take-home pay to the task. Plus, if this means you're following your professional passion, it's more than worth it.

4. Earn More Money for Life

  • Although it makes the most sense for students to earn their degree while taking as little debt as possible, there are other benefits besides a good job and decent salary. "There are benefits to a broader education, not least of which is the fact that your horizons will be expanded and you will be better educated in the long run," said Feirstein. "Every child at least deserves the option to consider higher education and not to think about it just as a way to earn a living."

Whether it's the learning experience of studying new topics, the social experience or perhaps the travel experience studying abroad at a university, college is more than just a professional education. Some of the benefits of higher education just can't be quantified on a pay stub, Feirstein said.

Check out the original article from The Huffington Post HERE.