Image from Pexels

Image from Pexels

While people on the high end of the socioeconomic spectrum have no trouble funding for their children’s college education without aid, the vast majority of American families require at least some sort of financial assistance. Sometimes, aid consists only of grants, that is, money that is given, not lent. But all too often, loans make up a substantial part of a student’s financial aid package, and in most cases, taking out those loans is the only way a student can afford his or her dream school. So, is it really worth it to take out loans for your undergraduate education?

The short answer is, yes, it can be. There are people who are adamantly against taking out loans for college and insist on attending schools of no real interest to them, just so that they don’t have to take out loans. But some loans may be worth it. For example, if one plans on going into a very marketable and high-returns course of study at a relatively prestigious institution and needs $10,000 a year in loans, that may very well be worth the cost. In other words, it’s important to look at the decision to take out loans economically while also being cognizant of long-term returns. 

Sarah*, a senior at Princeton University, has done just that. At the start of her college career, she knew she wanted to major in operational research and financial engineering at Princeton, with a certificate in computer science. She knew those two concentrations would be very desirable, and so she decided to take out approximately $50,000 in loans over the course of four years at Princeton. She will work for Morgan Stanley upon graduation and has plans to pay back her student loans within the decade. Of course, not everyone is quite so willing to take a gamble. After all, one could very well enter college as an engineer and graduate as an actor.

The decision should also take into account whether or not you want to attend graduate school, law school, or any other post-tertiary education. Graduate schools will also have hefty tuition bills, and so you may want to save yourself from taking out some loans until then.

John* goes to Emory University, and he definitely thought about that before choosing his current school over his then-dream school, the University of California, Santa Barbara. “Don’t get me wrong, I love Emory, and I wouldn’t change my decision if I could go back, but at the time, I settled for my second choice because of money.” John had the option of taking about $20,000 a year at UCSB or going to Emory and taking out only about $4,000 a year. He chose the latter, because he wants to go to law school after college. “Law school is going to cost a lot, and I don’t want to be almost $100,000 in debt before I even start law school,” John said.

Another important piece you should consider before taking out loans is the concept of your “dream school.” How do you really know that a place is your dream school? Sure you know people who go there, and the campus atmosphere is nice. But in reality, you won’t really know whether or not you’ll like a place until you’re truly embedded in it. So don’t get too carried away about going to your dream school. But if you know, without even a possibility of doubt, that a school is definitely for you, and loans are the only way you can attend, seriously consider it; don’t let people tell you that all loans are irrational.

The ultimate choice for you to make, in the end, is whether you want to sacrifice your education, the best possible experience you can have, for affordability. Will you be happier, or become more financially stable by going to a school that makes you take out loans? Each case is difference, and each person should decide after carefully putting the pros and cons on a scale and seeing which way it tilts. Money shouldn’t be a reason in giving up dreams, but sometimes, we do have to face realities.

*Names changed to protect identities

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