Since there has been consider debate in the media recently regarding borrowing for college, I thought I would share the following article.
http://money.cnn.com/2012/06/11/pf/college/student-loan-value/
Please pay particular attention to the last three paragraphs of the article. If you are prepared for college and do not have a fabulous job lined up with a high school degree, then borrowing for college makes sense as a financial investment.
Just because I am supporting borrowing for college, you should not interpret this as “borrow as much as I can from the government and private institutions because I am spending it on education.” You should still try to limit the amount that you borrow (as a professor of a state university, I would highly recommend checking into the available public options). In addition, a mistake that many of my students make is to work extra hours to earn money to support a particular lifestyle while in school (this causes their academic performance to decline or causes scheduling issues that require an additional – expensive – year in college). Remember the driving factor of increased lifetime income from attending college is to increase your human capital (or at least signal to potential employers that you have earned more capital). While in school, do not forget to plan for life after school. Students who start preparing for their job search early in school perform much better in the job market than those who wait until graduation. Finally, borrowing tens of thousands of dollars to prepare for a career that will pay 20K is not a wise financial investment. Have an idea of what you might want to do with your college degree and the corresponding salary expectations. With all of that said, borrowing money WISELY to attend college is an investment that can rarely be matched.