5 Questions to Ask Before Getting a Student Loan

5 Questions to Ask Before Getting a Student Loan

 

I know a young woman named Lauren who graduated from one of the top universities in the nation. Her love of learning was infectious. She dreamed of using her degree in education to serve her community as an elementary school teacher.

A year after graduation, she accepted a job at a public school in Nashville. She believed that all her hard work was finally paying off. But her dreams soon became a nightmare when she discovered that her small salary didn’t match the payments on her $90,000 student loan.

After a couple of years living under this financial weight, she decided to leave her dream job for a better paying but less fulfilling position in another field.

Unfortunately, I could tell you dozens of stories just like Lauren’s – stories of hardworking, talented young people whose dreams were crushed under a mountain of debt.

The truth is that we have a major crisis on our hands. Student loan debt hit $1.5 trillion last year. And in case you didn’t know, student loans are guaranteed by the federal government, meaning not even bankruptcy can save you.

That’s a big undertaking for anyone, much less an 18 year old preparing to enter university life.

So, how do you find the education you need to land the career you desire without sacrificing your future to a mountain of debt?

The answer might be easier than you think.

If you’re preparing for college, I suggest you start with the end in mind. Ask yourself:

  • What field do I want to work in?
  • How much does an entry level position pay?
  • What can I expect to earn over a lifetime?
  • Is this a growing industry that will be looking for new graduates?
  • Does this job require a bachelor’s degree or a master’s degree or certificate?

If you’re taking on any loans, talk with a financial aid officer and do your own homework. Determine how much debt you’ll have once leaving college and what your estimated payments will be. Talk to current and former students. Ask them how they feel about the program. Ask them how quickly they found work.

Remember, there is not a one-size-fits-all model. The amount of your investment should reflect your future earning power. If you plan to go to Harvard and become a corporate lawyer or a doctor, taking $100,000 in loans might be a good investment.

If, on the other hand, you want to be a school teacher, I’d suggest looking for a school that provides a great education and places you in a job upon graduation with an appropriate teacher salary.

College is one of the most expensive and important investments you will ever make. It’s imperative you do serious research and make your own decisions. Because ultimately, you’re investing in yourself, and you’ll be the one paying the bill.