Why You Should Take Out Student Loans for College

Smart Money Debate - Why You Should Take Out Student Loans to Pay for College

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 TwitterFacebookYoutube or Instagram.

Why you should take out student loans to pay for collegeDespite 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

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  • While I hate taking out loans and wish I never would have had to do it, there is no way that I could have went to college. At the time, my parents couldn’t afford it. I certainly couldn’t afford it. The only thing I wish I had done differently is spent my time studying a different field. Instead, in order to make a decent living I actually had to take out twice the amount of loans so that I could go back to school to get a degree that pays:) With all the time and money spent, I could’ve had a masters or doctorate! Argh!

    • One of the hardest parts of all this is that the people making the decisions about student loans are so young – as you mentioned, it’s common to choose a different path once you learn a little bit more about the wide spectrum of careers available, and people can accumulate debt before finding the profession they ultimately decide to pursue.

  • For the most part, I think this article is saying nothing different than what’s been said for years and part of the reason so many people are drowning in student loan debt now.

    It’s the feel good answer that makes people feel good about going into debt for school and that’s the main problem I have with it.

    Then there’s this:

    Because You Need Them? – WOW! Maybe if you’re going into medicine or law or some other highly specialized career field. Thankfully students I have spoke with are being creative about how they attend and pay for school.

    Because You Can? – You can do a lot of other things that don’t make sense and this is hardly a reason why someone should go into student loan debt.

    Because It’s Easy? – I’m seeing a trend here. Getting a credit card is easy. does that mean I should go stock up on credit cards?

    These aren’t reasons to go into student loan debt. They’re emotional justifications that have no real truth behind them at all.

    There are lots of ways to go to school without piling on a load of debt.

    What about scholarships? There are LOTS of scholarships available. All it takes is a little time and effort to apply for as many as possible but it’s LOTS BETTER than going into debt. No mention of this in the article.

    What about working through college?
    What about taking a few years off after high school to work and figure out what you want to do first. So many people pick something just to pick something and end up stuck in a career they hate with debt that is keeping them from doing something else.

    What about picking a 2 year school and transferring to a 4 year school to lessen the financial burden? That would certainly make school much cheaper and more affordable. Sure, it’s nice to be able to go to college right after high school if you can afford it but if you can’t there’s nothing at all wrong with figuring things out first. At least using this method someone could have saved a good amount of money to help even if they decided to still use student loans to supplement the difference.

    I’m sorry but going into debt for a degree based on the idea that it will be worth the investment is just not good enough anymore. That advice is old and out-dated. I think Kelli Space won this debate hands down.

    In a responsible article advocating for the use of student loans I would expect to see other options listed first and student loans listed as the last resort.
    Instead we got “because you need them, because you can, and because it’s easy.”

    No disrespect intended but I find this article to be lacking in any sound financial advice whatsoever. It’s irresponsible at best.

  • Vernetta Mitchell

    The problem with this article is that a plan was not put into place to pay back the money. Working in a void is not practical. It is the beginnig of a debt cycle.