Thursday, February 7, 2008

Think for a while before you take out student loans.

When I and the other applicants for TFA were sitting around chatting before the interviews, talk naturally turned to plans for the future. One girl stated, half-jokingly, "I figure the longer I stay in school, the more likely it is the world will end before I have to pay my student loans." There were a few chuckles, and others piped up about how they prefer to avoid thinking about the debt they've incurred in pursuit of their degrees.

Student loans are seen as a normal part of young adult life, and they are frequently cited as an example of "good debt." I don't exactly agree. Going to college, learning, and getting a degree are good things. Taking out loans to do so isn't, in and of itself, a good thing. It may be a necessity if you've exhausted your other options, but spending decades paying for your education is hardly something to look forward to.

Do what you can to minimize the amount of student loan debt you take on. It may not seem like a big deal right now, but you'll have more freedom after graduation if you aren't saddled with large payments. Apply for every scholarship you can, look for summer employment, and try to minimize your living expenses. Weigh financial aid offers carefully, and seriously consider finances when you decide where to attend.

An instructor at a program I attended the summer before my senior year in high school urged his students to avoid taking out loans to pay for their undergraduate degrees. He told us that if we plan to get doctorates in science, the top universities will still be around and offer fellowships, teaching assistantships, and research assistantships to pay their graduate students to attend. He insisted that graduate programs care far more about what you do while you are in college than the university you attend. It's easy to buy into the idea that an undergraduate degree from a prestigious university will help ensure future success, but people who are driven and capable should be able to get a good foundation at any decent school; a friend of mine from our (not particularly well known state school) physics department won an NSF Graduate Fellowship and was accepted by every graduate program she applied to, including MIT and UC-Berkeley. (She's at University of Illinois Urbana-Champaign, in case anyone was wondering.)

I'm tremendously glad I took his advice. I now have the option to take a low paying but fulfilling job for a few years before graduate school because I have no debt and substantial savings. If I owed tens of thousands of dollars, I'd feel far more pressure to pursue a more lucrative profession to try to get myself out of the hole.

7 comments:

Its No Joke, I'm So Broke said...

I think this is a good post. However, I would just like to add that it really depends on what your major is, most liberal arts majors who may not be great at or interested in science or business based majors in my opinion have a more difficult time getting scholarships, as well as many graduate programs in that area do not really have the alumni funds to support students throughout their graduate careers. It would be great if everyone could live a life without student loans. In my case, I had parents that did not plan for me to go to college (savings, or good credit to cosign) so I was on my own. As well as the "closer" or less expensive schools in my state were still expensive and required loans. I understand what you are saying, and I do not think you are completely wrong (especially with the $40,000 a year schools with out aid, I know a couple of people in that situation) but I wish your situation was more easier done than said. (if that makes any sense)...

Its No Joke, I'm So Broke said...

I think the title is great... I thought about taking out my loans up until the deadline. But I knew I wanted to be the first in my family to go to college so..... Here I am (student loan payments are actually payments I do not mind, I understand that no matter what no one can take the knowledge I have gained or my degree for that matter, lol)....

SJean said...

I could argue the benefits of loans, but yeah, most people already think they are "good". They can be good, they can be dangerous (and private student loans are given too freely to young people who don't understand them!) Private loans are the scariest.

In science, if no one will fund your phD, you probably shouldn't be getting one.

Mrs. Micah said...

Yeah....our debt is pretty much all Micah's loans from his student debt. $110,000. It'd be a much freer easier life if we didn't have that looming.

That One Caveman said...

I went to a state university on a full scholarship and immediately felt the benefits of having no debt as soon as I graduated. It was nice that all of the money I made was mine.

My wife, on the other hand, went to a private university on student loans, part-time jobs, and her savings. She graduated with a lower GPA due to the time constraints of having a job, high debt from her loans, and no savings. She could have come out much better if she had driven the same distance in the opposite to a well-recognized state school and saved her money.

Now we are both burdened by paying her student loans. Due to some strange circumstances, we cannot consolidate or refinance the loans so now they're above the 9% mark. I console myself with the fact that at least the interest is tax deductible...

It is a good practice to graduate with the least amount in loans possible! Bravo for making that happen for yourself!

Jim said...

That's good you're able to make it out of school without student loan debt. I went to a state school, got some financial aide but also took out some student loans. My wife did not have the advantage of getting any help so leaned very heavily on student loans. I think part of the problem with student loans is not just that they are so easy to take out, but the university tuition costs continue to go up dramatically every year. It is making it more and more difficult to afford school and students graduate with even more student loan debt as a result. We're sitting on six figures of student loans and it's going to take some time, dedication, and getting serious about paying them off. My wife hates to look at her balances but it is what it is, and we have to clean up the mess now. We both agree that we will setup college savings for our children. No debt is good debt, but sometimes debt can get us what we want at a cost.

Crimson Ghost said...

The advantages of going to a top private university (Ivy, MIT, etc.) cannot be understated, though. The alumni networks and the number and quality of recruiters who recruit at such schools give students a leg up on the competition. And with the recent changes in financial aid policies, they are more affordable than ever. I would say that a talented high school senior would be a fool to not try to get in to one of these places, at least. There is also the comunity college to good state school route available (especially in CA), which people should also keep in mind.