When you drop out of college with student loans, debt without a degree can put a strain on finances, especially if you were already living paycheck to paycheck.
If earning a degree is still a dream of yours, it makes sense to consider going back to college. But if you’re not careful, you could end up back where you are now – with even more student debt.
Does getting your degree make sense for you? Here are some questions to ask yourself before deciding if going back to college is the right financial choice for you.
6 questions to ask before going back to college
1. What are the other options for dealing with student loans?
When you re-enroll in college, you federal student loan payments are deferred. That means you will not be required to make payments until six months after you graduate.
But you shouldn’t go back to college just for a temporary reprieve from student loans. Plus, your existing student debts will grow in deferment, thanks to accruing interest. And you’ll likely have to borrow even more to cover new college expenses.
If you’re struggling with these debts, first consider other student loan repayment options. Perhaps an income-driven repayment plan that will lower your student loan payments. Refinancing student loans could also make them cheaper and more affordable.
2. Will your college credits count toward a degree?
Going back to college might be more worthwhile if you have already made significant progress. The more credits you earned before you dropped out, the closer you might be to an actual degree.
But college dropouts can’t always just pick up where they left off.
Alexis Chateau, founder of Alexis Chateau PR, explains how a friend of hers decided to take a semester off but then let two years pass before he tried to re-enroll.
“By the time he returned, the curricula had changed, and his credits were no longer valid,” Chateau says. “He had to start over from scratch.”
Curriculum changes or differences between colleges can make transferring credits tricky. Credits can also be unusable for other reasons. For instance, if they’re too old, they’re a poor match for you target college, or come with poor grades altogether.
If you’re not sure how many credits you earned or if they’ll still count, contact the admissions offices at the colleges you hope to attend. The college counselors can compare the credits you earned to the degrees they offer. They will advise you on how many of your credits will transfer, and how long it might take to complete your schooling.
3. Can you keep working while you attend school?
With the advances in education, students have more options and flexibility. If you can attend college courses without disrupting your life too much, that’s a big plus.
“If you are almost finished, find a way to work part time and finish classes while you are working,” says Deborah Sweeney, CEO of business documentation filing service MyCorporation.com. “There is so much flexibility in education nowadays. You can transfer units, you can go to school online and you can go back to many colleges on a part-time basis.”
If you can keep your day job and attend night or weekend classes, you won’t have to sacrifice a steady income for college. And that will make it easier to cover some of the costs out-of-pocket rather than borrowing more.
4. Can you get financial aid, grants, or scholarships?
If your existing student debts are a burden, or you’re not sure how you plan to pay for college, cost will be a key factor. Choose colleges that are cost-effective, such as community college or public four-year schools, over private or for-profit options.
When returning to school, you should file a Free Application for Federal Student Aid (FAFSA) to see if you qualify for federal aid. Look for scholarships, grants, and institutional aid from your college that can help cover your costs. There are even scholarships and grants specifically for dropouts completing their degrees.
Keeping your college degree affordable is key to making sure going back to college is a smart investment. The more help you can get to cover college costs, the fewer student loans you’ll need to take out.
5. Are you choosing a high-paying career path?
No one should head to college without a clear plan for their education – and how to use it to launch a well-paying career. That starts with choosing a college and major that will be your stepping stone to a better career and higher earnings.
Carefully choose a college that produces highly-paid graduates. Get an idea of how much the college degree you’re interested in is likely to improve your career prospects.
Most universities report outcomes and employment of their graduates. You can also check outcomes for graduates with your degree and major. Plus, check out the typical wages the U.S. Bureau of Labor Statistics reports for the positions you plan to pursue.
You should also make the most of the resources available to you in college to make yourself a marketable graduate. Work on job-seeking skills and network within your industry. Don’t hesitate to ask your professors what you can do to improve your chances of being hired – then follow through.
6. Is it the right time to go back to college?
Successfully going back to college requires dedication, planning, and hard work. Therefore, be honest about your situation, and whether returning to college is a smart move right now.
The timing could be right to finally earn your degree, or you might need another year to save and prepare. It is a big commitment, and not one to make lightly.
But if you’re ready to make this investment in yourself, give it all you’ve got while avoiding debt.
“Education can be of high value – exposure to great learnings, excellent contacts, and to put you ahead of others ‘in the pack’,” says Sweeney.
At the end of the day, you have the power to make smart choices and work hard to ensure that college is worth it.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|