Should you use student loans to pay for your college education?

It is sad to say, but college is not what it once was. Gone are the days, where you could go to school and be confident you’d find a good job after completing your degree. The economy continues to shrink as more and more individuals find themselves confined to part time positions or no job at all.

Why are we talking about jobs in an article about college debt? Because college is supposed to get you a job—a job that pays enough for you to live independently and cover all the debt you rack up in school. Before you sign up for 10+ years of debt payments, read this expert advice on taking out student loans to cover the cost of college. 


Do know exactly how much you will owe

Before you do anything—including attending college—you need to do some simple math. How much debt are you going to have to take out to attend college? Not just for the next semester or year, but how much is your education going to cost you over the next four to six years? Are you going to have to go on to grad school to be successful in your chosen profession?

To begin, take any scholarships, grants, college savings plans, and other guaranteed and non-loaned money you have for college, and subtract that amount from the total (or best estimate) of all of the years of college for which you will be billed—for tuition costs, on-campus housing, off-campus housing, meal plans or a grocery budget, and as many of those other additional fees and costs (known and unknown).

That remaining amount is the difference, and is how much you will still owe. That difference is what usually gets people to take out student loans. Use an online loan calculator to add up how much it will cost you to repay the entire loan plus its added interest. 

Do assess the value of the school’s name

In some industries and professions, the name of the school you attended can be just as important as your degree. Before you sign up for years of debt payments for a well-known and expensive school, make sure it makes sense to pay a premium to have that college’s name on your resume. Then take your search a step further and research the specific departments of the school. Do the departments have inside access to the jobs in your market? Can they help ensure you will get a job after graduation?

Do research your desired profession’s salaries

The whole point of college is to prepare you for a job in the real world. It makes little sense to rack up $100,000 in loans if your profession is only going to pay you $40,000 a year. Before you sign on the dotted line for a big loan, make sure you will actually make enough money after graduation to pay for your expenses and the loan payments.

Do have a long term plan

A four-year college or university can easily cost hundreds of thousands of dollars. You need to have a long term plan. Not just for four years, but for six to ten years out. Yes, things will change, but you have to have a solid plan if you’re going to borrow large sums of money. If for whatever reason you can’t come up with a solid long-term plan, create a plan that provides the most future job opportunities with the least amount of debt. A solid plan could include your chosen profession, top companies you’d work for, and a temporary job you’d have until you graduate. You want to know exactly where you are going, how to get there, and most importantly—how to pay for it.

Do find alternatives

Whether or not you know what you want to be when you grow up, the best way to find out is to look for other ways into the industry or company you want. A college degree doesn't guarantee you a job of any kind anymore. Alternatives can include a less expensive college or university, a technical school, community college, or even a change in profession. 


Do not take out a loan if you are undeclared

If you don’t have a major in mind, or not sure what you want to do with your life, don’t take out loans. You don’t need to be in college to figure out what you want to do for the rest of your life. In fact, the best place to find out is in the work place. There is no shame in going to community college and interning (paid or not) at a company that is of interest to you. Just try and learn new things that you’re interested in, and you will eventually find what you’re looking for. You can always transfer to a four-year institution once you know what you really want to do.

Do not take out a loan if you are attending an online college

If you are going to be taking online classes, you shouldn’t be taking out debt to do it. If you do decide to take out debt, it should be so small you could easily pay it back with a summer job. We’ve all seen the enticing ads for these “go at your own pace” programs that promise applicable skills that will guarantee a job. These programs are, oftentimes, not only overpriced, but looked down upon by employers when compared to more traditional four-year universities. There are plenty of accredited community colleges that provide a mix of in-person and online classes that are much cheaper than many online-only schools. 

Do not think college will guarantee employment

Unless you specifically have a job lined up already, don’t think that a college education is going to be significantly helpful finding employment. According to the Pew Research Center, current graduates are of the first generation, since the Great Depression, to have higher levels of poverty and unemployment than the previous generation at the same age. On top of that, more than a quarter of them still live with their parents, and only 30% think of their current jobs as careers. And yet, the current generation of graduates is considered the best-educated generation in American history.

Do not assume your parents can foot the bill

The economy is hitting everyone, including your parents, who are also trying to save and plan for retirement. They may be able to take out student loans or co-sign for you, but if they are anything like the majority of Americans, they already have their own debt to deal with. It’s okay to ask for help—particularly room and board—but the loans your parents would have to take out for you will wind up being much more expensive than if you’d taken them out on your own.

Do not think a 4-year college is something you have to do

There is no shame in not going to a four-year university straight out of high school anymore. It is no longer a requirement for success. Community college and real world experiences tend to be much more economical in the long run. A college education used to be the answer for improving your status and expanding your opportunities. However, for the first time in American history, it isn’t. You are a part of the first generation to confront this harsh reality.

Jumping cartoon

If there is only one thing you take away from this article, it’s that you must assess if the debt is worth it. I encourage you to reach out to a career counselor or a professional in the industry you want to pursue, so you can plan out a career path that minimizes the amount of college debt you must take on. Taking on college debt is not a decision you should take lightly. The age where a college degree provided an employment-guarantee is over. It’s not to say college isn’t useful—you just need to be more strategic on how and where college fits into your life, and the kind of money you’re willing to spend on it.

More expert advice about Financing Education

Photo Credits: #55657614 - College graduate with large tuition bill, horizontal © Burlingham -; Check Man, Cross Man and Jump Man © ioannis kounadeas -

Jason WhalingFinancial Educator

Jason Whaling is the founder and CEO of The Wealth Titans. A financial education company dedicated to the training and development of individuals to reach their financial goals. Jason left his professional career as an accountant working at a la...

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