When borrowing to pay for college, remember the Pilgrims
Share Now on:
Paying for college has practically become synonymous with financial ruin.
We’ve all heard the stories of graduates toiling at minimum wage jobs at best, weighed down by student loan debt.
That’s given rise to a new strand of conventional wisdom that warns young people to steer clear of borrowing for college. The message: College isn’t worth it! You don’t want to join the ranks of debt-slaves with a diploma!
Hold on a minute. We know few students these days can afford college without borrowing some money, but the average student loan balance is about $24,000. And the median is around $13,000. These are onerous sums for newly minted college graduates in a lousy economy, but they’re far from catastrophic.
Throughout our history the American dream has often come with a loan repayment schedule. The Pilgrims were able to settle in Plymouth, Mass., only because they were backed by London merchant bankers.
My fear is that the student loan scare stories will persuade young people to steer clear of college, especially those from low-income families.
Bottom line — college remains the best investment most people will ever make in their lifetime. Case in point: graduates earn some 50 percent more than their peers with only a high school diploma.
Don’t get me wrong. The financial aid system cries for reform. Many college graduates are hurting and tragically, some have borrowed more than they can ever repay. However, the student loan debts will eventually pay off in the form of jobs and wealth.
So, please, borrow sensibly. Go to a college you can afford. Avoid private student loans. And take out as few federal student loans as possible.
And by all means remember the Pilgrims.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?