The Pros and Cons of College Loans

Growing up in an upper-middle class town outside of Boston, the price of college was not a prominent issue when I was applying to schools six years ago. Although my parents were strapped for money, and unable to afford college for my older sister, twin brother, and I (all at the same time), they never led me to believe that my college search should be hindered by our family’s finances. My parents wanted me to get the best education possible, at the college of my dreams.

When I was accepted early decision to my first choice school, a top-ranked private university, I was thrilled. As I proudly taped the acceptance letter to my wall, not once did the price of airfare, luxury dorm rooms, and a 60k yearly tuition cross my mind.

I heard my parents mumble about private vs. federal loans, the FAFSA, and tuition exchange programs (certain colleges—not mine—qualified for a discounted tuition, as my mom is a college professor), over the course of my Senior spring, but never had a detailed conversation with them about the financial responsibilities of paying for my own college education.

Over the four years of college, I became more aware of my future loan burden. I was lucky enough to be granted a merit scholarship each year of college—but the rest of the tuition was covered by loans.

Is College Worth the Price?

My college experience was the best time of my life. I joined a sorority, studied abroad, made amazing friends, who I still talk to every day. But as a post-graduate, working professional, I can’t help but wonder if it was all worth it.

My monthly college loan payment currently equals my rent. This makes me angry, especially when I contemplate what else I could be spending my money on or how much I could be saving if it weren’t for my loans. It drives me crazy that college is really this expensive. That is why I came up with a list of pros and cons of college loans—from someone with plenty of experience.

[An independent advisor can help you choose the right college for your financial needs.]

Pros and Cons of College Loans

PRO: You won’t have to limit your college choices.

Being unaware and naïve about my financial situation going into college is affecting me now, but it acted as a pro when it came to college applications. I didn’t only look at public colleges, or schools that would give me a huge scholarship—I looked for schools that I knew I would love; schools where I could picture myself. My college was the perfect fit for me, and if I had never applied because I couldn’t afford it, I wouldn’t have lived through those amazing college experiences.

CON: Your post-graduate life will be heavily influenced by your loans.

I had dreams of moving to New York City after college. I honestly couldn’t picture my young adult, post-graduate life anywhere else. But as I applied for dozens of NYC jobs, and spent more time there, I realized I could never afford the lifestyle. Even if I had gotten one of those jobs, and made an average or high starting salary, I would not be able to afford even the cheapest rent available. Not to mention groceries, toiletries, and all the other things that keep me ALIVE.

PRO: You will understand the value of a dollar.

You will have no choice but to put yourself on an extremely strict budget after college. You will learn, probably before many of your peers, that money is valuable and scarce. You will have to make sacrifices. But think about the years in the future when you won’t have loan payments anymore—you will have extra money every month, and you will know how to spend it wisely.

CON: You will have to be selective about your first job.

Landing a job after graduation is extremely stressful in this economy. While many of my fellow-students got hired at some point during our senior year of college, I graduated without a job, and spent all summer and fall looking for one. With loans in the mix, the job application process is harder, and you must force yourself to be selective. You can’t take the first job offered to you—no matter how badly you want it—if it doesn’t pay enough to cover your loans and other necessary expenses.

PRO/CON: You won’t regret your college choice.

This is something you have to ask yourself—was it all worth it? Can I accept my current financial burden because I loved my time at college? Should I have gone somewhere cheaper?

Your Experiences Make or Break Financial Outcomes

I regularly contemplate the “what if” scenario. I could have gotten a full scholarship to a different school, and would have more freedom as a post-grad. But when I think about all that I would give up if I hadn’t gone to my college, I come to the conclusion that my experiences are worth the monthly payments.

Of course, I cannot predict what I would have done as a high school senior had I known about the future of my finances. The most important thing is to be as educated as you can before you choose a school—have an honest conversation with your parents about how many loans you need to take out, interest rates, and what your post-graduation life will look like. That way, you will be more prepared than I was.

Don’t let money hinder your college experience completely. Don’t let tuition be the only deciding factor in choosing your school. Remember that money is something that comes and goes, and can almost always be worked out if you budget and spend wisely. Your college experience is something that will change your life forever, more than a loan payment ever could. I strongly believe that my experience cannot be monetized.

Now you must decide: Will your college experience be worth the loans?