You’ve received college acceptance letters and been admitted to a few schools. Congrats! Now, you have to make a choice.
In an ideal world, your decision would be based solely on which school you like. In reality, there’s often a financial component to consider. If one school costs far less, is it ever worth taking on more student loan debt to attend the other?
“Paying additional tuition for a more expensive school is worth it if the value is there,” said Crystal Olivarria, the founder and CEO of Career Conversationalist, a company focused on helping young people make better choices about education and careers.
But, how can you tell? Experts recommend asking these four questions to help you decide.
1. How much more will the expensive school cost?
When comparing two schools, don’t look only at their tuition charges. Factor in the cost of living, fees, textbooks, and other expenditures. The important figure is the total debt you’d end up with.
“If you’re really set on an expensive school, look into ways to lower the cost,” advised Adrian Ridner, the CEO and co-founder of educational platform Study.com. “Research low-cost alternative credit options, such as online courses that can speed up your path to graduation and ultimately save you thousands of dollars in tuition.”
If you’ve explored all your options and there’s a significant cost discrepancy between the two schools, consider how you’ll feel after graduation if you’re left with tons of debt.
“It can take decades to pay back student loans, and they can be a burden when trying to buy a home or save for retirement,” Ridner warned. “Think about if going into crippling debt is really worth it.”
Talk to people who’ve graduated with large student loan balances or read their stories to understand what it takes to pay back a massive debt. You can use our student loan payment calculator to get a sense of how much you’ll owe each month in loan payments.
“It’s so important for a student to understand what it means to have a $1,000-a-month payment before signing up for it and how it affects their expected take-home pay,” said Greg Kaplan, a college admissions strategist who’s the author of “Earning Admission: Real Strategies for Getting into Highly Selective Colleges.”
You might decide that taking on huge debt is worth it, but be informed before making that choice.
2. Will you have a better chance of landing a good job?
Going into debt for a costly college impacts your life in negative ways, but there can be some advantages. First and foremost: You might have more career opportunities.
If a cheaper college isn’t widely respected, you might have a harder time finding work after graduation. And if you can’t get a job in your field, paying back a smaller debt might be harder than paying back a larger balance on a bigger income.
However, don’t assume a costlier college always leads to a better job. “Employers usually care more about the degree you earned and not the name of the school you went to,” Ridner said. “It’s important to decide if you’re paying for a brand name, or if it’s a school that will help you develop marketable career skills.”
How can you decide that? “Find out what companies regularly pull interns from the school through the career center,” advised Nikki Bruno, executive director of Student Coaching Services. “Are they big names?”
Also, ask the college about its job-placement rates. The measurements that schools use usually aren’t scientific and might not take into account whether the student is employed in his or her field, so don’t be afraid to ask follow-up questions.
Review U.S. News & World Report, which provides information on how students from different colleges fare after graduation. Or consult the Global University Employability Ranking 2017 to see which schools are preferred by recruiters.
3. Will you earn a higher salary?
Your after-graduation salary makes a big impact on how difficult it is to repay student loans. If graduates from a costlier school often earn higher salaries, attending that college might be worth it in the long run. You’ll have more debt, but your potentially higher income would help you pay it off faster, and then you’d enjoy a lifetime of higher earnings.
To get an idea of whether you’ll earn more, compare starting salaries for graduates at schools you wish to attend. You can get this information from the U.S. News & World Report page mentioned above or from individual colleges.
Be sure to factor in your particular field of interest. “For some paths, there’s no benefit from studying at a private or out-of-state school that is more ‘prestigious,'” advised Kaplan.
Use Bureau of Labor Statistics data to check the wage gap between the highest-paid workers in your field and those who earn the average salary. If workers earning the most in your profession don’t make much more than the median salary in your field, then graduating from a more prestigious school isn’t likely to result in a higher income that would justify paying the extra tuition.
Looking at salary data also helps you consider how the total debt from studying at each school would compare with your earning potential. If the salary you’d earn in your chosen career isn’t enough to make debt payments affordable, you shouldn’t plan to borrow, Bruno said.
If going to a costlier school won’t allow you to earn a much larger salary, it might not be worth the extra debt. However, your total debt might not be a big consideration if you plan to embark on a career, such as medicine or education, that qualifies for many loan forgiveness options.
4. Will you be better prepared for your career?
Most accredited colleges can do a good job of providing a broad education on the basics. But, some colleges are much better at preparing you for particular jobs.
“When deciding whether to pay more for a costlier college, decide how much better prepared you’ll be to enter the workforce after earning a degree [from that school],” Olivarria said.
If the school you’re considering allows you to specialize in the field you’re interested in, it might be worth paying extra for in-depth career training. For example, if you want to become a teacher, you could pick a school with a renowned education program. If your goal is to become a doctor, a school such as the University of Rochester, which offers the Rochester Early Medical Scholars Program, could save you money, time, and stress by allowing you early admission to medical school.
By choosing a college that sets you up for career success, you could advance in your field more quickly, and possibly make enough money to pay back any additional funds you had to borrow.
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