Student loans can be helpful. Really. They can cover a gap between your college’s cost of attendance and what you and your family can afford to pay out of pocket. Of course, it’s better for the college to cover this gap with scholarships and grants, but even the most generous schools include loans in most of their financial aid packages.
Because a four-year college degree boosts your earning potential by $1 million over your lifetime, student loans are generally a good investment. That being said, you should be very careful with the size of the loans you agree to take. The larger your loan, the higher your payments will be, and high monthly payments can really constrain you when you first leave college and are financially vulnerable.
I recently found an infographic on CollegeScholarships.org that underscores the seriousness of student loans. I’ve included it below. When you read it, make sure you note the following:
- You will never be able to get rid of student loan debt aside from paying it.
- The less you pay off your debt, the more expensive it gets.
Both are good reasons to make sure your student loans are as small as possible.
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