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

is college worth it

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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