Five Major Factors to Consider When Taking on Debt for School
There's a popular saying that “no man is an island”. When it comes to making the decision to attend college and take on student debt, however, the decision is yours alone. In this scenario, you could be an island. The upside is that the more education you possess, the better your chances of career success.
Your skills and talents are far more likely to be in demand professionally. However, the academic picture gets more complicated when considering the ramifications of student debt. The following five factors are worthy of consideration when making the decision to further your education.
Will Your Debt Be Worth It?
Wondering if a college education will justify the debt incurred is foremost on the mind of thousands of college students. Taking on debt is an individual choice, but there is evidence that, for students, it pays off in the long run. According to a specialist from Faber Inc, those with college degrees out-earn those without by, on average, $18,000 annually. This finding also seems to hold true for industries that don't traditionally require a degree. An undergraduate degree often trumps a high school diploma.
Do You Have a Sound Repayment Strategy?
It only makes sense that you have a sound repayment strategy before taking on school debt. It's possible for college to feel like a rite of passage in a live-for-the moment mentality. However, that mentality can turn sour when the reality of your debt comes full circle. With education, it's reasonable to assume that you'll earn a salary that can address present and future bills. Just take the time to figure out how you'll handle competing financial obligations if your dream doesn't go according to plan.
Should You Seek Private Funding?
If the cost of your education exceeds the availability of federal loans, you may have to consider private funding. In this instance, a healthy credit file can be instrumental in helping you qualify for a private loan. Healthy credit can also make a huge difference in loan size, term length and interest rate.
Will Your Income Be Adequate?
Consider the fact that you may graduate from college and not be able to find your dream job right away. While a degree can make you better-qualified to find a job, entry-level pay may not be enough to cover the monthly payments on your student loan.
Are You Ready for the Academic Road Ahead?
Investing in your education can be one of the most important financial decisions made in your lifetime. Dealing with life and meeting the imposing demands of college can be a challenge. The worst case scenario would be to put your education on hold while having incurred additional school debt. Be ready for the challenge from start to finish.
While an education can help you achieve the career of your dreams, just remember; for many, education may come with substantial costs.
Photo Credit: UBC Learning Commons