Don’t Acquire Excessive Student Debt

by Dr. Ben on November 16, 2011

For many years students graduated from college debt free or with manageable student loans.  However, in recent years, this has become increasingly challenging to accomplish.  Colleges have been raising tuition and fees at a rate much higher than general inflation.  Recent government data released for 2010 reveals that average debt for graduates having loans exceeded $25,000 for the first time.  This data excludes the for-profit education sector which operates some of the priciest colleges in the country.  (The for-profit sector failed to provide sufficient information to be included in the Project on Student Debt report.)

Student views that they will be able to recoup their college expenses and quickly repay their debts may also be also be unrealistic, particularly since the unemployment rate for recent college grads is, at 9.1%, roughly comparable to the overall national rate.  So both student debt and recent graduate unemployment levels are at historic highs.

In view of these facts, those planning to attend college would be wise to consider ROI (Return On Investment) potential, and consider attending institutions with lower credit unit costs.  Most state or local public institutions fall into this category.  A college education is certainly worthwhile, and graduates typically earn substantially more than those without a degree. However, don’t be naïve, thinking that you don’t need to comparison shop or that you’ll be able to easily pay off your student debt.

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