Money Myth: Worth it to Go Into Debt for Education

With the average student loan debt currently totaling $39,351 per borrower, considering the cost of your education and your options for financing it becomes increasingly important. You've likely heard that student loan debt makes sense because of the increased income potential. But while 2020 data from the Bureau of Labor Statistics does show a median weekly earnings boost from $781 for a high school graduate to $1,305 for someone with a bachelor's degree, this doesn't mean that going into debt for an expensive college degree will be worth it. Instead, you'll want to consider the cost at various schools and potential salaries and find ways to minimize costs for your degree.

When researching schools offering your desired program, you'll find that the cost of tuition and fees will vary widely. This heavily affects the debt you might incur.

For example, if you were to complete two years of education at a community college, you might pay just $3,440 on average each year based on the College Board's data. If you opt for a four-year public college for a bachelor's degree, you might pay an average per year of $9,410 as an in-state student or $23,890 as an out-of-state student. If you opt for a private college, the yearly average tuition and fees can soar to $32,410. Keep in mind these costs usually go up each year as well.

Of course, these amounts don't include other significant costs you might incur depending on your situation. For example, you have to consider room and board and other expenses like supplies and books. According to Education Data, such costs can add between $12,665 and $16,284 per year at public schools and $13,984 to $21,083 per year at private schools. These can easily exceed the cost of your actual tuition.

Along with looking at education costs, you'll want to consider that the earnings potential can vary by degree and job title you end up with. This is important since you don't want to go deep into debt for a degree that doesn't offer much of a payoff. It also gives you something to think about when considering the monthly payment when repaying the loan for your education.

For example, a 2021 salary survey by the National Association of Colleges and Employers reported average starting salaries for several bachelor's degree disciplines. For example, someone earning a computer science degree would earn $72,173 on average starting out, while someone with a degree in agriculture would have a lower average starting wage of $54,857. Business degrees led to $58,869 on average compared to $58,174 for communications degrees. Engineering degrees were among the top, with an average starting wage of $71,088.

You can use the Occupational Outlook Handbook on the U.S. Bureau of Labor Statistics website to easily explore the salary potential and job outlook for your desired career. You can use salary data with a student loan payment calculator to determine the total costs with interest your degree may incur and see how the payments compare to your future earnings.

While earning a college degree can offer you increased career opportunities and earnings potential, you'll want to minimize your debt so that you don't end up making large student loan payments for 10 years or longer. Here are some steps to take to lower your educational costs.

Paying for tuition, fees and all other expenses can easily exceed the amount offered through federal grant programs and lead to taking out a considerable amount of student loans. Therefore, you'll want to closely research the cost of attendance at each school and carefully consider your financial situation.

Unless you have an employer paying entirely for your tuition at a specific school, it helps to complete your first two years at a community college where you can pay much lower tuition and commute to save on room and board. You could finish your bachelor's degree at an in-state public institution to keep costs lower the last two years of your program.

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Using scholarships can help you reduce or even avoid student loans, so you should research all the opportunities you have. Options can range from full-ride scholarships that cover everything for your college degree to small scholarships that might help pay for books.

Start looking on scholarship search websites, checking with your school's financial aid department, researching professional organizations and private companies and talking with any employer about scholarships available. You'll want to carefully fill out the application and include required supporting materials like proof of income, work samples or an essay.

​Consider also​: Finding Scholarship Opportunities

Some companies like Walmart and Target already have agreed to fully finance tuition for their employees earning relevant bachelor's degrees. However, plenty more companies offer some kind of tuition assistance that can offer several thousands of dollars in funds.

You should ask your current employer about if you qualify, how much you could receive, which restrictions there are and what to do to apply. Note that this method might require paying your tuition on your own and getting the employer to cut you a check later.

​Consider also​: What Is Tuition Reimbursement?