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| | | -- By CharlesRoper - 17 Feb 2016 | |
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< | Is Higher Education Debt Good or Bad Debt? | >
> | The Problem
The usual notion regarding higher education debt is that is an investment in one’s future and that any debt incurred achieving higher education is good debt. This proposition is most evident by the governmental guarantees that ensure the obscene tuition costs will be funded. The premise behind good debt is that it is an investment and although you may owe money, at the end of the day it is really putting money back in your pocket, usually through higher returns.
While attending undergraduate university the typical student incurs a debt of nearly 30,000 dollars. See Average Student Loan Debt Approaches $30,000. If a student decides to continue their education into graduate school, one sees a sharp spike in tuition. With one quarter facing “good” debt over 100,000 dollars and one out of ten incurring over 150,000 dollars; all in addition to their undergraduate loans, which are still incurring interest. See How Much Loan Debt is From Grad Students? More Than You Think.
The incursion of higher education debt is often seen as commonplace and one seldom envisions the negative effects this debt may have. Since graduates are crippled with student loans; even if they are able to secure a job, a large percentage of their income goes directly to the monthly loan payments. The loan payments on top of rent and other living expenses and necessities prevent recent graduates the ability to form any type of savings. The lack of savings kills the economy. Instead of being able to use the potential increase in salary from the “good” debt of student loans to further invest in the economy, either through mortgages and home improvements or savvy stock market investments, the majority is forced to use any gain in paying off the student debt. With the large debt looming over recent graduates, many are desperate to find any job that will provide them with the ability to make the monthly payments. Upon successfully finding a job many soon realize that their debt ball and chains them to the job, through the ever looming monthly payments.
Granted, the incursion of debt to fund higher education is avoidable. Especially undergraduate debt, however, graduate debt with the drastically increased tuition and curricular demand is much harder, but not impossible, to avoid. | | |
Why I Still Chose to Incur Higher Education Debt | |
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> | I currently am a straight through from undergraduate university and have chosen to take out loans to finance the entirety of my graduate education. | | |
Undergraduate | |
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> | Starting out like a great number of university students, I did not work during the school year in order to properly adapt to the university curriculum and fully take in the college experience. While I did still work full time during the summers, the income gained from the three months of full time work only amounted to covering food and necessities. Then during my junior summer I began interning for free at a local law firm, since I knew law school was my next progression and the internship allowed me to gain a better insight into the workings of the law. While during my senior year I started interning during the school year as well. Although I was getting paid a modest salary, this was just able to cover travel, food, and necessities. | | |
Pre-Law School | |
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> | I know that many of my current classmates have taken, on average, two years off before progressing to law school. However, I always envisioned law school as the path I would take after undergrad and did not want to delay my journey into it. When speaking with friends that have taken years off before law school, the majority state that they did not do so intending to save up money to cover the cost of law school, but rather to make sure law school is what they truly wanted to pursue. Knowing law school is where I wanted to go and that a two year hiatus working somewhere outside of law would not only prevent me from following my passion but also barely cover undergraduate debt, I chose to use the governmental guarantees to fund my law school tuition. | | |
Law School | |
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> | During my 1L year after being consistently lectured that the only thing that matters are grades, specifically your 1L grades, I chose not to work and took on loans to fully cover tuition so I could fully focus on the curriculum. As for my 1L summer, the law school advisors all stated that you may work anywhere as long as it is within law. Granted depending on where one wants to end up after law school this may have more or less weight; however, I do want to be practicing law and knew that an internship within the field of law would be a highly valuable experience, even if not seen via a paycheck. I ended up applying to a variety of places but only secured offers for the public sector, which is still highly rewarding work; it just does not help regarding covering tuition. In fact, GSF for my 1L summer is not even covering the full cost of my rent for the summer, not including travel and food. In order to lessen the burden my 2L year, I am going to be working during the school year. While this in no way is going to be making a dent in my tuition cost/loans, it will hopefully aid in covering food and basic living necessities. | | | Personal Results | |
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> | While having a debt larger than the average American spends on a house is daunting and will greatly affect my ability to invest and make large financial decisions years after graduation, I believe I am satisfied with the path I have chosen. I could have slightly reduced my higher education if I took a few years off before law school. However, I knew the practice of law is what I wanted to pursue and I did not want to give up a few years of my life, not practicing law, to reduce my higher education debt by a fraction. | | |
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