Welcome to the 5th Smart Money Debate at ReadyForZero! To see the other side of this debate, read Kelli’s post: Why You Should NOT Take Out Student Loans for College. And then let us know which argument was more convincing!
This post is written by Dominique Brown, a financial planner, landlord, personal finance blogger and video blogger. He is the owner of YourFinancesSimplified and InsiderRealEstateTips where he talks about everything from being a new father to his worst financial mistakes. You can find him either on Twitter, Facebook, Youtube or Instagram.
Despite the abysmal job outlook for college graduates, the amount of college registrations steadily climbs each year. In 2010, there was a 2.9% increase in the number of first time students in four year public colleges from the year before. However, in 2011, there was a marked decrease in the amount of first time students enrolling in college.
Why? Well, I think it’s because of the overwhelming amount of unpaid college loan debt: lenders may just be creating stricter loan requirements for first time borrowers. Yeah right! Maybe people are realizing that it costs a lot to get a college education, or they are finally doing some form of cost benefit analysis prior to borrowing money.
Let’s face it, there is a lot of risk in borrowing money these days. You might even be a little scared to take out a loan for college – heck I was – but here are three good reasons to take out student loans to pay for college:
Because You Need Them
This is the main reason why I took out student loans! Truth be told, the world needs bright, educated, passionate people. Meaning the world needs college educated people to carry the torch. In order for us to move forward, as a country, into the new emerging world markets, high school students need to go to college.
With that said, jobs aren’t guaranteed for college graduates, but the median pay rate (anywhere from $45k to $75k) is much higher for people who have college degrees–that means a better future is possible for those who take the plunge. Now if you can’t afford to pay for the college education in cash, or you don’t have a college fund set up from your parents, you should take out student loans, go to college, and graduate.
If you want to earn a promising living, and you can’t afford it, you need to take out student loans for college. If the return on your investment exceeds the loan amount, then there is nothing wrong with taking out student loans.
Because You Can
I’ve always heard the following statement from my parents and peers, “Why did you do that?!” “Because I can!” The same holds true for why you should take out school loans for college. If you get accepted into a top 5 school but you don’t have the money and student loan money is available to you, why would you want to turn your nose up at it? Even if you don’t get into a top 5 or 10 school the payoff for a college education can be well worth it if you choose your major wisely. Yes, the interest rates can be scary, but if you have the smarts and know how to make good money decisions, a loan can be a total win for you.
I went to George Mason University in the D.C. area, I choose an appropriate major for the area I would live in (my major was job market focused) and everything worked out just fine.
However, if you’re one of those people who is going to college for college’s sake… well I have a CAVEAT for you: taking out loans for college isn’t a right; it’s a privilege for those who intend to pay back what is owed. Many people, who take out school loans, run into a slight problem after graduation, and put their loan responsibilities on the back burner. So be sure to have a plan!
Because It’s Easy
This one one is a bit of a stretch, but a reason to take out college loans is because it’s easy. I felt a little dirty saying that. However, if you get into your dream school when you start the enrollment process at your college of choice, the Financial Aid office will contact you to start your grant, scholarship, and loan paperwork. Taking out student loans was by far the easiest loan I have ever taken out in my life. This is scary and amazing at the same time.
However, if you’re a bright, hopeful, and passionate person, you deserve the opportunity to attend college even if you cannot immediately afford to do so. You could have the opportunity to attend the college of your choice if you take out student loans. Personally, if I had to do it all over again, I would take out student loans in a heartbeat. I can’t imagine how my life would have turned out if I hadn’t attended GMU.
What about you? Would you take out student loans if you couldn’t afford to go to college? Share you experience in the comments.
To see the other side of this debate, read Kelli’s post: Why You Should NOT Take Out Student Loans for College.
Image by Tulane Public Relations