Student Loan Benefits

Going to college is a big decision for anybody, particularly for those who have to obtain what can be a very costly student loan and pay it back slowly after they’ve received the education and have found a job. Making the decision has very far reaching consequences, so how do you know if college is right for you?

Well, according to a study out of the Brookings Institution’s Hamilton Project, college is definitely worth it. Their findings seem to indicate that obtaining a college degree is an across the board way of increasing an individual’s total earning potential. Regardless of what is actually studied, those who have attended college have higher median earnings than those who have not.

It isn’t simply a slight increase, either, as the study found that someone who has obtained a bachelor’s degree will earn, on average, twice the amount that someone with only a high school degree will earn in their lifetime.

The increase in lifetime earnings is a net benefit, but it does come with the cost of debt. The amount money required for college and the amount of debt that each individual student must take on is rising. While no one is happy about this, it’s still a net benefit to go to college and get a degree. There are other downsides involved, too, as college debt has been shown to decrease the housing market, makes the graduates more likely to default, and cuts down significantly on other spending.

Student Loan Debt

There are a number of other ways that would make the whole situation better for Americans, such as having the federal government use its own credit rating to give students a much better deal, giving better funding to schools to make it so colleges don’t have to increase tuition costs, and there are also grants to consider as well.

While there certainly are lots of areas to improve the system, obtaining a student loan in order to go to college is still the best way for an individual to increase their overall earning capacity throughout their life. Investors do love leverage, as borrowing money is an overall more cost effective way to purchase something than saving up for it beforehand. Average Americans aren’t strangers to debt, as loans are used all the time for things such as cars, furniture, or even homes. Unfortunately, those sorts of things fall in value as soon as they’re purchased, whereas a loan to get a degree earlier will give you even more value throughout your life.

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