4 Essential Steps to Decide If College Is Worth It for You

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Is college worth it? That’s a tricky question. College isn’t cheap, but many believe it’s the way to obtain a “good” job. You have to spend money to make money, right? But does that make it worth it?

It depends. The cost of college has created a situation in which 44 million people have had to use student loans to get their degree. And 53 percent of those with student loans would change their past borrowing decisions if they could, according to the Financial Industry Regulatory Authority’s 2016 National Financial Capability Study.

While that doesn’t necessarily indicate regret over going to college, it does suggest regret in how they handled the cost of college. So one of the questions shouldn’t just be “Is college worth it?” but also “Are student loans worth it?” Here’s how to make sure you can turn the answer into a “yes” for you.

Making your college education worth the cost

The best way to see if college is worth it is to understand that everyone’s situation is different. Then consider the four questions below to come up with an answer that’s right for you.

1. Do you have a clear plan for success as a college student?

College should be fun, but it shouldn’t turn into a life experiment costing you tens of thousands of dollars. To make sure college is worth the debt, you need to have a clear plan of how you’ll be successful.

Even if you don’t particularly like school, you can optimize your course load to get good grades. Strategically schedule your classes for times you’re most alert. Make sure you don’t overload yourself with too many challenging courses at once.

One of the most financially crippling events is taking out student loans and then not finishing a degree. A 2016 College Board report cited data showing that 24 percent of students who dropped out defaulted on their student loans within two years. Only 9 percent of those who did get degrees defaulted.

Leaving school without a degree or certificate puts you in a position of taking on debt without the benefits a degree can offer. This includes more employment opportunities and higher pay potential. Finishing your degree is crucial.

Get to know yourself and what you need to do to succeed. Talk to people about the study habits that work best for them. Take a look at the resources your school might have to offer. The better you do in college from the start, the more worthwhile your investment can be.

2. Can you find an affordable way to go to college?

The next step is to take on as little debt as possible. Here are a few things you can do.

  • Take core classes at a community college. Then, transfer to a four-year school so you can spend far less on your first two years.
  • Take summer and winter break classes to finish your degree more quickly. (Just make sure you do the math, as sometimes these particular classes cost more per credit.)
  • Go to a local school so you can live at home — avoid room and board costs.
  • If you receive offers for school-specific scholarships, consider choosing the school that gives you the most money. (The tuition remaining should still be less expensive than your other options.)
  • As you evaluate schools, give extra consideration to those offering work-study programs. Those can enable you to earn money towards your degree.

Once you’ve figured out how to shave as much off your college costs as possible, think about how to pay for the rest.

  • Use websites such as FastWeb to look for scholarships you qualify for. Apply for as many as possible before you resort to loans.
  • Fill out your FAFSA to see what kind of federal financial aid you can get. This can help you avoid private student loans.
  • If you need help paying for your education, opt for the cheapest financial aid first.

3. Can you calculate how you’ll handle student loans after college?

If you have to take out loans to pay for college, figure out how much they’ll cost. Then use this student loan payment calculator to see what your payments will look like when you graduate. That way, you’ll know if you can actually afford the school that’s on the top of your list.

Keep in mind that your calculations might change over time due to unforeseen circumstances. This includes a hike in tuition costs or a changed major that leads to longer schooling. While there is some unpredictability in this, that doesn’t mean you can’t make sure you’re as prepared as possible.

Once you know what you’ll be dealing with, start crafting a plan now for how you’ll handle the loans. Will you start saving for an emergency fund while you’re in school so that you’ll have a cushion ready when you graduate? Do you know how to change student loan repayment plans if needed? Start figuring out what you’ll want your finances to look like now so you can set the plan — and the habits — early.

4. Do you know what kind of work can get with your degree?

If you’re lucky enough to know what you want to study early on, you can choose a school based on the quality of that program, their job placement record, and the cost of the program compared to other schools.

But even if you’re not yet sure what you’ll major in, you can start your research on what to expect after graduation with the help of your school’s career center and sites like TheMuse. Knowing how much you can expect to earn in different fields will help you evaluate them from a financial perspective.

Take a look at potential pay and how competitive the job market is in your field with the help of Glassdoor and Payscale. After you’ve found some salary ranges, use sites such as Paycheck City to understand what the take-home pay will be. Then go back to your student loan calculations to see how much of that salary would be taken up by your student loan debt.

So, is college worth it? The stats say yes

In December 2016, the College Board released a report called Education Pays 2016: The Benefits of Higher Education for Individuals and Society. Updated every three years, this report analyzes various life outcomes for those who do and don’t have a college degree.

Here are just a few key findings from the report:

  • Those with a degree earn more on average. In 2015, full-time employed bachelor’s degree holders earned 67 percent more than high school graduates without a degree.
  • Degree holders fare better in the job market. The 2015 unemployment rate for 25- to 34-year olds was just above 2 percent for bachelor’s degree holders, compared to more than 8 percent for those who only had a high school diploma.
  • Employees with a degree are more likely to receive retirement benefits. In 2015, 52 percent of private sector, full-time workers with a degree were offered retirement benefits, compared to only 43 percent of the same without a degree.
  • More degree holders have employer-provided health insurance. In 2015, 38 percent of bachelor’s degree holders had employer-provided health insurance, while only 26 percent of those with just a high school education did.
  • Poverty is more common among non-degree holders. According to the U.S. Census Bureau, 2015 saw more than 12 percent of those 25 and older without a degree in poverty, compared to just above 4 percent of bachelor’s degree holders.

All that said, is college worth it? Apparently so — even with the debt involved. The report goes on to say the average person who graduates in four years will earn enough to compensate for the cost of college by the time they turn 34. And even those who went to college but didn’t get a degree will still, on average, exceed the earnings of a high school graduate by the time they’re 35.

According to the report, “the longer college graduates remain in the workforce, the greater the payoff to their investment in higher education.” In other words, if the thought of college and debt are completely overwhelming to you now, you can still look forward to a more positive future because of these things — if you handle them thoughtfully.

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2 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.

Information advertised valid as of 5/29/2019. Variable interest rates may increase after consummation.


* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

4 Important Disclosures for Discover.

Discover Disclosures

  1. Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
  2. View Auto Reward Debit Reward Terms and Conditions at DiscoverStudentLoans.com/AutoDebitReward.
  3. Aggregate loan limits apply.
  4. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans, including Undergraduate, Graduate, Health Professions, Law and MBA Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable Margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month LIBOR is 2.63% as of April 1, 2019. Discover Student Loans will adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Please click here for more information about interest rates.                                                                               https://www.discover.com/student-loans/interest-rates.html

5 Important Disclosures for SunTrust.

SunTrust Disclosures

Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.

Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.

©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.

* Offer valid for new Custom Choice Loans for which applications are submitted for a credit decision between 12:00:00am EST on June 1, 2019 and 11:59:59pm EST on August 31, 2019. A 0.50% interest rate reduction will be included in the loan options presented to an applicant during the online application process, upon passing the initial credit review. The interest rate reduction will be applied as of the first disbursement date and will be effective for the life of the loan.

  1. Interest rates and APRs (Annual Percentage Rates) depend upon (1) the student’s and cosigner’s (if applicable) credit histories, (2) the repayment option and repayment term selected, (3) the requested loan amount and (4) other information provided on the online loan application. If approved, applicants will be notified of the rate applicable to your loan. Rates and terms are effective for applications received after on or after 06/01/2019. The variable interest rate for each calendar month is calculated by adding the current index (One-month LIBOR index) to your margin. LIBOR stands for London Interbank Offered Rate. The One-month LIBOR is published in the “Money Rates” section of the Wall Street Journal (Eastern Edition). The One-month LIBOR index is captured on the 25th day of the immediately preceding calendar month (or if the 25th is not a business day, the next business day thereafter), and is rounded up to the nearest 1/8th of one percent. The current One-month LIBOR index is 2.500% on 06/01/2019. The variable interest rate will increase or decrease if the One-month LIBOR index changes or if a new index is chosen. The applicable index or margin for variable rate loans may change over time and result in a different APR than shown. The fixed rate assigned to a loan will never change except as required by law or if you request and qualify for the auto pay discount.
  2. APRs assume a $10,000 loan with two-disbursements and the summer savings rate discount of 0.50% (applicable to applications submitted for a credit decision between 12:00:00am EST on June 1, 2019 and 11:59:59pm EST on August 31, 2019). The high APRs assume a 15-year term with deferred principal payments. The low APRs assume a 7-year term, no deferment and payments beginning 30-60 days after the last disbursement via auto pay from a SunTrust Bank account. See footnote 6 for details about auto pay.
  3. Any applicant who applies for a loan the month of, the month prior to, or the month after the student’s graduation date, as stated on the application or certified by the school, will only be offered the Immediate Repayment option. The student must be enrolled at least half-time to be eligible for the partial interest, fully deferred and interest only repayment options unless the loan is being used for a past due balance and the student is out of school. With the Full Deferment option, payments may be deferred while the student is enrolled at least half-time at an approved school and during the six month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date. The Partial Interest Repayment option (paying $25 per month during in-school deferment) is only available on loans of $5,000 or more. For payment examples, see footnote 4. With the Immediate Repayment option, the first payment of principal and interest will be due approximately 30-60 calendar days after the final disbursement date and the minimum monthly payment will be $50.00. There are no prepayment penalties.
  4. The 15-year term and Partial Interest Repayment option (paying $25 per month during in-school deferment) are only available for loan amounts of $5,000 or more. Making interest only or partial interest payments during in-school deferment (including the grace period) will not reduce the principal balance of the loan. Payment examples within this footnote assume a 45-month deferment period, a six-month grace period before entering repayment, the summer savings rate discount of 0.50% applicable to applications submitted for a credit decision between 12:00:00am EST on June 1, 2019 and 11:59:59pm EST on August 31, 2019, no rate reduction for auto pay, and the Partial Interest Repayment option. 7-year term: $10,000 loan disbursed over two transactions with a 7-year repayment term (84 months) and 7.772% APR would result in a monthly principal and interest payment of $189.71. 10-year term: $10,000 loan disbursed over two transactions with a 10-year repayment term (120 months) and an 8.235% APR would result in a monthly principal and interest payment of $153.33. 15-year term: $10,000 loan disbursed over two transactions with a 15-year repayment term (180 months) and a 8.712% APR would result in a monthly principal and interest payment of $127.35.
  5. The 2% principal reduction is based on the total dollar amount of all disbursements made, excluding any amounts that are reduced, cancelled, or returned. To receive this principal reduction, it must be requested from the servicer, the student borrower must have earned a bachelor’s degree or higher and proof of such graduation (e.g. copy of diploma, final transcript or letter on school letterhead) must be provided to the servicer. This reward is available once during the life of the loan, regardless of whether the student receives more than one degree.
  6. Earn an interest rate reduction for making automatic payments of principal and interest from a bank account (“auto pay discount”) by completing the direct debit form provided by the Servicer. Earn a 0.25% interest rate reduction when you auto pay from any bank account and an extra 0.25% interest rate reduction when you auto pay from a SunTrust Bank checking, savings, or money market account. The auto pay discount will be applied after the Servicer validates your bank account information and will continue until (1) three automatic deductions are returned for insufficient funds during the life of the loan (after which the discount cannot be reinstated) or (2) automatic deduction of payments is stopped (including during any deferment or forbearance, even if payments are made). In addition, the extra 0.25% interest rate reduction for auto pay from a SunTrust Bank checking, savings or money market account will be discontinued if automatic payments are no longer made from one of the aforementioned SunTrust Bank accounts. In the event the auto pay discount is discontinued, the loan will accrue interest at the rate stated in your Credit Agreement.
  7. A cosigner may be released from the loan upon request to the servicer, provided that the student borrower is a U.S. citizen or permanent resident alien, has met credit criteria, and met either one of the following payment conditions: (a) the first 36 consecutive monthly principal and interest payments have been made on-time (received by the servicer within 10 calendar days after their due date) or (b) the loan has not had any late payments and has been prepaid prior to the end of the first 36 months of scheduled principal and interest payments in an amount equal to the first 36 months of scheduled principal and interest payments (based on the monthly payment amount in effect when you make the most recent payment). As an example, if you have made 30 months of consecutive on-time payments, and then, based on the monthly payment amount in effect on the due date of your 31st consecutive monthly payment, you pay a lump sum equal to 6 months of payments, you will have satisfied the payment condition. Cosigner release may not be available if a loan is in forbearance.

6 Important Disclosures for LendKey.

LendKey Disclosures

1 – Terms and Conditions Apply
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers. Your initial rate will be determined after a review of your application and credit profile. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
2 – Cosigner Release
Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.
3 – Autopay Rate Reduction
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.


7 Important Disclosures for CommonBond.

CommonBond Disclosures

A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.

Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.

Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
If you are unable to pay your government loan, the government can refer your loan to a collection agency or sue you for the unpaid amount. In addition, the government has special powers to collect the loan, such as taking your tax refund and applying it to your loan balance.

A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If you refinance your government loan, your new lender will use the proceeds of your new loan to pay off your government loan. Private student loan lenders do not have to honor any of the benefits that apply to government loans. Because your government loan will be gone after refinancing, you will lose any benefits that apply to that loan. If you are an active-duty service member, your new loan will not be eligible for service member benefits. Most importantly, once you refinance your government loan, you will not able to reinstate your government loan if you become dissatisfied with the terms of your private student loan.

If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you are a borrower with a secure job, emergency savings, strong credit and are unlikely to need any of the options available to distressed borrowers of government loans, a refinance of your government loans into a private student loan may be attractive to you. You should consider the costs and benefits of refinancing carefully before you refinance.

If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.

Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.


8 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Student Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of June 1, 2019, the one-month LIBOR rate is 2.43%. Variable interest rates range from 3.99% – 11.79% (3.99% – 11.64% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.90% to 12.19% (4.90% – 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan. 
  2. Citizens Bank Student Loan Eligibility: Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank- participating school.  
  3. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply. Borrowers whose loans were funded prior to reaching the age of majority may not be eligible for co-signer release. Note: co-signer release is not available on the Student Loan for Parents or Education Refinance Loan for Parents.
3.99%
11.98%
2
Undergraduate, Graduate, and Parents

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4.50% – 11.35%*,3Undergraduate and Graduate

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4.84%
11.99%
4
Undergraduate and Graduate

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3.27% – 10.80%5Undergraduate and Graduate

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4.46% – 9.43%6Undergraduate and Graduate

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3.74%
9.72%
7
Undergraduate, Graduate, and Parents

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3.99%
11.64%
8
Undergraduate, Graduate, and Parents

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