Are student loan borrowers the new pilgrims?
In this insightful article from the Star-Tribune, writer Chris Farrell compares current student loan borrowers to the pilgrims that settled in Plymouth Bay in 1620. These pilgrims were backed by London merchant bankers and eventually bought out their investors, paying off their debt in installments.
Student debt is good debt
Farrell argues that, as just as the pilgrims took out loans to come to America, taking out loans to pay for college is not necessarily a bad thing. It would be worse, he argues, for students to avoid attending college altogether, since college graduates earn some 50 percent more than their high-school-only peers. Farrell worries that all the recent uproar over student loans will cause potential college students to put off college or assume it’s not worth the investment. This, Farrell argues, is a faulty assumption. He writes:
Don’t get me wrong. The current financial aid system is a disgrace. The system cries out for reform. Tragically, some students have borrowed more than they can ever repay. That said, the debt used to finance a college education will pay off for a majority of undergraduates, especially as the economy improves.
Borrow student loans responsibly
To avoid getting into trouble with student debt, Farrell offers an impassioned plea for students to borrow responsibly and make sure they fully understand what they’re getting into when taking out loans:
Go to a college you can afford. Avoid private student loans. Take out as few federal student loans as practical.
College is still a good investment
We think Farrell really hit the nail on the head with this one. Even though college is expensive, it remains one of the best investments you can make in your future. But not college investments are equal. That’s why you need to make sure you choose a college that will give you a positive return on your investment and take factors like your major, earning potential, and financial situation into consideration when figuring out how to pay for college.
Remember, you don’t have to take out all the loans you’re offered. Everyone’s situation is unique. And if you need help deciding how much to take out, feel free to contact us or call us at 1-888-234-3907.