College Loans: Not Always Good Debt
photo credit: berbercarpet
We often think about “good” and “bad” debt, and mortgages on a home and student loans for your education normally come down on the side of good debt. But a recent Laura Rowley article prompts us to think otherwise - and perhaps it’s timely advice for you, if you’re about to start college or are planning for your children’s future at college.
First up, an interesting statistic: the proportion of graduates who say they borrow less if they could go back and start college again is rising, and is now up to 54%. Many are realising that they could have approached college life differently, and spent less money, or could have chosen their school different (and more cheaply) but still ended up with a useful qualification and perhaps even got into the same job.
Considering whether an expensive college is necessary or not is one of the major decisions to make. For students who intend to go on to graduate school, then attending a home state college with low costs for the undergraduate degree is often perfectly alright - future employers will pay much more attention to the name of your graduate school, anyway.
The best tip is to consider the average starting salary for graduates of your course - this information is easily available from student advisors - and then only borrow a maximum of this amount for the total of your college years. Then you should be able to pay it back within ten years or less.
This entry was posted on Friday, September 12th, 2008 at 4:16 am and is filed under College and Education. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
September 15th, 2008 at 1:29 pm
It’s obvious we need to do a better job teaching people about money. I’ve done some work with Junior Achievement. They have a lot of programs in this area. Here’s their site, for anyone who is interested http://www.ja.org.