Understanding the value of college debt

Understanding the value of college debt

By Seth Saunders, KSL.com Contributor | Posted - Aug. 8, 2012 at 8:33 p.m.



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SALT LAKE CITY — There is an ever-increasing spotlight on the debate surrounding college debt. There are plenty of opinions on whether or not going into debt to for a college education is worth it. It's important to understand the value of what you're going into debt for — both short-term and long-term — when the reality of debt is in front of you.

There is no denying that debt is a very unforgiving master. Most of us have had to deal with debt in one way or another. For some it was to purchase a house, for others a car and for others their education. All of these are very worthy for one to go into debt for, but to do so blindly leads to many unpleasant and often life-changing problems.

The problem comes when a student has not sufficiently prepared for the financial impact of earning a degree. That's why it's important to help potential students understand the value of the education they will receive.

There is no question that earning a degree carries enormous value. According to the Wall Street Journal, “Economists say college is an increasingly good investment because of the widening pay gap between jobs that require a degree and those that don't. Ultimately, the educational degrees and added skills are meant to help workers earn higher incomes that, in time, will more than offset the student debt.”

But such investments don't come without risk — in this case, being able to pay off such a large debt without the guarantee of a job. The article continues, “Student debt is a burden not just for recent college graduates in their 20s but also parents, who often co-sign their children's student loans, as well as midcareer professionals who opted to go back to school during the sluggish recovery."


People must ask themselves what they are willing to invest in their education before going into debt.

It is important that we do not allow others to decide whether education is valuable to us. We should feel empowered to make one of the most important decisions of our lives.

Here are some tips for helping students prepare for the reality of college debt and keeping them focused on the value of earning a degree:

  1. Start saving today: Let's cut to the chase: To earn an education today, you will have to pay for it. Even with all the scholarships and grants available, it's unrealistic to think your education will come for free. Plan on making some type of payment for your education. Even if you are told that financial aid will cover the cost, plan on making regular payments. If you plan now, you will be better prepared when you do crunch the numbers and realize you have to put some skin in the game. You will also be thankful for saving when you graduate and find that what you owe back in loans is smaller than what you anticpated.
  2. Ask questions: Don't be afraid to ask lots of questions when speaking to a university. If you don't ask, you may miss out on important information. Be sure to ask questions about total cost, career service support, payment plan options and other ways to help pay for school. Ask what options there are if you do find economic hardships while attedning. You are paying for your education, so you deserve to know the truth.
  3. Know your goals: If you are going to spend a lot of money on your education, you need to have a good idea of what you want to do for a living. You may not know exactly from the beginning, but you should have a good idea. If not, be sure to — again — ask questions and let the staff at the university ask you questions.
  4. Work hard in school and after: No one should ever guarantee that you will get hired when you graduate. If you hear something like this, you need to either dig deeper or walk away. However, there are many universities that have invested a lot of resources to help students prepare for the workforce and will do all they can to help a student land a job. Realizing that you still need to take full responsibility for finding a job will ensure your success.

The debate about student debt is not going to go away anytime soon. As we continue to see the ups and downs with unemployment as well as the limping economy, we will continue to hear both the negatives and positives about going into debt for one's education.

At the end of the day, all this attention should be looked at as a great thing. People must ask themselves what they are willing to invest in their education before going into debt. Becoming more educated about debt and the cost of education will help students become more confident in what they are getting themselves into.

Seth Saunders is currently branch president of the Pembroke Branch (Spanish) and President of the Pink Shoe Hero Foundation. Seth has been married 15 years to his amazing wife Amber and is the proud father of three wonderful sons.

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Seth Saunders

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