Student Loans can Work

Student loans are making life difficult for people of all ages: students, their parents, and even older folks who have not been near a college for decades. As the problem gets more publicity, students might reasonably wonder why anybody would borrow money to go to school.

A reader recently asked Liz Weston if it’s worth the risk to use student loans. Weston explained that there are plenty of good reasons to borrow for school — just don’t go overboard. People with college degrees tend to earn more over their lifetimes, and they seem to benefit from lower unemployment rates. If you can’t pay cash for your education (many can’t), modest borrowing can help you invest in your future.

While an undergraduate degree is a pretty safe bet, graduate degrees can also help in some fields. Unfortunately, those degrees cost a lot, it’s not as easy to borrow, and the payoff isn’t always there — unless people in your field tend to have high earnings, such as doctors. As you plan your education (where you’ll attend classes and how much it will cost), be sure to investigate what your future earnings might be. It’s very hard to predict where you’ll actually end up, but a ballpark figure can help you make an informed decision about how much to borrow.

 

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