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Why student loans are worth it

Natalia Lusinski

September 19, 2019

While college tuition continues to go up, so, too, does student loan debt. According to College Board’s Trends in Higher Education, tuition and fees for the 2017-18 school year were $34,740 for four-year private, non-profit schools, and this went up to $46,950 with room and board. Naturally, this may make you wonder why student loans are worth it. Namely, they enable you to get an education you otherwise couldn’t necessarily fund yourself. “Without a student loan, I could not afford to go to college,” 37-year-old Becky Beach, founder of MomBeach.com, tells Pillar. “I believe that student loans are worth it as long as you have an action plan to pay them off quickly after graduation.” She says it took her five years to get her $30,000 in student loan debt paid off — and she did so through having her own online business. “Having a college education gets your foot in the door at prestigious companies and helps you earn more money in the long run,” she says. “While I decided to go into business for myself, I couldn’t have done it without the skills I learned in college.”

Taj Tsonga, mid-30s, agrees that student loans are worth it. “As the son of an immigrant father and American mother, access to these funds helped increase my exposure to higher education,” he tells Pillar. “Student loans funded my entire New York University graduate degree in journalism, and I knew upon my first day of grad school that this experience was going to change my life — it did.” Before he finished his first semester, he was offered his first internship at The New York Daily News. “That was all I needed to enter the wonderful world of media,” says Tsonga. “I am an avid believer that it is very important to have the opportunity to follow your passion — and student loans allowed me to; my career is proof.” Today, he’s a senior producer at Condé Nast and no longer has student loan debt.

Steffa Mantilla, 35, founder of Plantsonify.com, is a personal finance blogger who recently paid off her student loan debt. “After having paid off my student loans, I still think they were worth it,” she tells Pillar. “I had a modest amount of student loan debt, $12,000 — my parents had saved up to pay for most of my college but they had no idea how the Expected Family Contribution (EFC) calculation worked.” She says that until they were filling out the Free Application for Federal Student Aid (FAFSA) for her (the oldest of three children), they had never gotten an estimate prior, so it came as a shock.

“My high school didn’t teach us about applying for college scholarships — the school guidance counselors met with all junior students for a 10-minute meeting one time,” says Mantilla. “Essentially, if I didn’t have the option for student loans, I wouldn’t have been able to go to college.” She also says that since she knew what degree she was going to major in, the wisest decision she made was to go to a lesser cost in-state university rather than one of the larger flagships or out-of-state ones. “This saved me thousands of dollars that I would’ve had to take out in student loans,” she says. “Overall, student loans are beneficial if you keep the total amount lent small. And knowing what the job prospectus is for the field you want to go into lets you know the max you should attempt to borrow.”

Ciara Hautau, 27, lead digital marketing strategist at Fueled, also tells Pillar that although she took out a ton of school loans — “and, at times, I get frustrated with paying them back” — she ultimately thinks it was worth it. “I grew up in a family of six and was the youngest; unfortunately, that left little to no money to cover me for school,” she says. “I had the option to either go to a New York state school — or go to my dream school down South.” She decided to take out student loans and pursue her dream to go to Clemson. “It was an amazing experience that gave me the experiences I wanted to develop my personal life and career,” she says. “I built a huge network from people all over the country and had the ability to travel and grow in ways I could have never imagined if I had stayed in New York. Had I not taken the loans out, I know I would have always thought what if and may have taken a completely different path.”

Marissa Sanders, 30, founder of the personal finance site, Simple Money Mom, tells Pillar that since the cost of a college education has become so expensive, the only way to afford it is to take out loans. “You have to weigh all the pros and cons,” she says. “Although I graduated with $15,000 in student loan debt, I was able to pay them off in five years, resulting in a total amount of $17,000 with interest.” She says that since she’s made an average of $55,000 per year, she’s made a 1,500% return on her investment in five years. “So for me, my student loans were definitely worth it,” she says. “If you think about them as a return on your investment, you can make a better decision as to whether or not student loans will be worth it to you.”

Greg Kuchcik, in his mid-30s and the VP of HR at Zeeto, just finished paying off his student loan debt after about 12 years and $35,000. “As someone who had a good amount of student loans to get through college, as well as being involved in hiring, I get to see many perspectives on how student loans influence people,” he tells Pillar. “For all the negatives you hear, I do see positives from going into student loan debt.” He says he thinks the biggest overlooked positive is four years of social and emotional intelligence experience. “When you are fully immersed in a four-year college program, you gain invaluable life lessons on how to interact with others, deal with stress, and juggle impossible timelines, and you also gain an appreciation for what you are learning,” says Kuchcik. “All-in-all, there are plenty of pros — and only focusing on the financial impact of student loans may ruin the many benefits you gain.”

What Student Loan Experts Say About Why Student Loans Are Worth It

Leslie H. Tayne, Esq. of the Tayne Law Group, tells Pillar that when it comes to student loans and whether or not they’re worth it, there’s not a clear cut “yes” or “no” answer to this question. “In my experience with my own student loans, my kids’ loans, and hundreds of clients who have student loans, it depends on a number of factors, including your goals and objectives with your education, and ultimately, your ability to repay those loans,” she says. “Student loans can work for you and be the best loan you ever took — or be a thorn in your side, depending on how you use them and your ability to repay them.” She suggests doing a personal and family financial evaluation of the costs for your education and how and when you’ll be able to repay them, the source of the funds, and the impingement of that payment on your lifestyle. “Since tuition costs continue to rise, meaning students are borrowing more and more to go to school in a job market that seemingly demands at least a bachelor’s degree, student loans are well worth it if you can create balance,” she says.

Tayne says one thing to consider is what you’re planning to study in school and what your career prospects will be like when you graduate. “For many career paths, where you go to school is not necessarily as important,” she says. “As a result, you may be able to go to a less expensive school and receive a comparable education and graduate with similar job prospects as you would have from a more expensive school.” However, jobs that do generally have higher starting salaries may be the ones where a more expensive education — or additional schooling later on — would make a difference, she adds. “You should try to weigh what you’ll be making against what you’re borrowing and decide whether borrowing more will make a difference one way or the other in the long run,” says Tayne. 

She also recommends asking yourself if you’ve exhausted every other option to pay for school. “Make sure you apply for financial aid and scholarships, and consider any college savings you and your family have been putting away to pay for your education,” says Tayne. “These can help decrease the amount you take out in student loans, which can make your debt load more manageable.”

Greg Sundahl, independent educational consultant at Boomin’ Future College Planning in Port Jefferson Station, NY, tells Pillar that student loans are worth it because they allow you to continue your education. “Student loans are an investment in your future and can allow you to achieve your professional goals,” he says. “In turn, this will open doors for career advancement and higher overall lifetime earnings.” Plus, they are a popular option to finance an education if the student attending college doesn’t have enough money saved for the overall cost, he says. “They are also a great way for a student to build up their credit, since they’re usually the first major financial transaction they will experience,” he adds. “And by having student loans, graduates quickly learn and understand the importance of money and budgeting, allowing them to become better at aligning their personal goals with their financial obligations.”

At the end of the day, only you can decide if student loans are worth it. But, judging from the above, they are when you take into consideration your career goals and the return on investment.

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