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Is Student Loan Debt Really Worth It?

The growing student loans are a serious reason for concern in Western countries. As students need a university degree to get jobs that are in demand in the modern economy, they are willing to pay thousands of dollars in tuition fees to get a degree from a reputed university. However, this burden can affect students’ ability to seize certain opportunities and can even affect their mental and physical health. So the logical question is: Is student loan debt really worth it?

Growing Student Loan Debt

The amount of student loan debt is growing rapidly and will inch past the $1.5 trillion milestone by the end of 2019. Universities in the West are increasing their tuition fees as they have a steadily growing demand from students of Asia and Middle-East. The amount of student loan debts might increase substantially in the near future as the booming economy is making many students opt for a college education.

Does the University Degree Offer Good Rewards?

The university degree acquired by incurring a high student loan debt should offer good rewards. If a high school graduate is taking a loan to pay for a university degree, they should be able to earn a substantially higher income in their entire career. The rewards should be at least 100 to 200 per cent higher than what she would have earned without ever attending the university. Since getting good grades is vital to make the degree worthwhile, students can use the help offered by an essay writing service or a PhD thesis writing service to hedge themselves against academic risks.

The Advanced Education Should Be Worth It

The university degree that the student wishes to pursue should be indispensable for pursuing the desired career path. A number of young entrepreneurs have founded viable businesses without a management degree. Bearing the burden of heavy student loan debt is a needless hassle for getting a university education in such cases. Pursuing a needless degree will also result in incurring an opportunity cost in the form of lost income doing another job and gaining real-world experience.

A medical and legal degree is mandatory to pursue a career as a doctor or lawyer. Simply put, if the advanced education desired by a student is worth receiving, then there is nothing wrong with taking a loan.

How Fast Will the University Degree Pay Back the Loan?

Students should be able to pay back the education loan with the income generated after they finish the course. They should consider the time it will take to pay back the loan using the money earned after graduating from university. A general rule of thumb is that the student should be able to meet expenditure incurred for earning the certificate within the first year of starting her career. For example, if an MBA course costs $100,000, the student should be able to get a starting salary package ranging between $80,000 and $120,000 to quickly pay back the loan. After paying for the living expenses, the student will be able to pay back the loan without much difficulty.

Opting for Alternatives

A university degree is increasingly becoming a basic requirement for getting a job in emerging areas such as analytics and biotechnology. Openings in such sectors are limited to students who have required intelligence and analytical capabilities. For those who do not meet the standards, a university degree will not offer equal rewards. Bearing the burden of heavy student loan debt is not worth for such students. Opting for alternatives such as vocational education to be trained as an electrician can offer better returns for high school graduates with average grades rather than going to college. Modern online education offers courses and degrees at a fraction of the price charged by conventional universities. Students can even opt for such courses to quickly get a degree without leaving the job.

Getting a loan is worth it as long as it can reward the students in the form of better career prospects. Some analysts blame the growing student debt on private for-profit universities. Until some policy interventions are made by the regulators, growing student debt is a reality that students need to live with. However, before taking the plunge, students need to check the reputation of the university and the market value of the certificate given by them.