The Blog Of TL Wall Accounting

Archive for December, 2016

Educational Debt Can Be Overwhelming

These days one has to ask themselves if the cost of getting a quality college education is worth it. A degree from a major university can end up costing more than 2 good homes, especially if the student decides to go for an advanced degree. One has to ask if it’s worth it and, if so, how they’ll be able to pay for it.

Joint Graduation Day
Sarah R via Compfight

Unfortunately, college debt is one of two debts that you can’t erase if you declare bankruptcy; the other is tax debt. College debt, though it can’t get anyone throw in jail or fined, will most often be higher and harder to deal with. This is because lenders don’t always work with families on how much needs to be paid monthly, though most will work with you as to when you have to start paying on it.

At some point one has to figure out what’s worth it and what’s not worth it when going to college. For instance, is a bachelor’s degree from Harvard really worth more than one from a 4-year state school?

In general no; if the student went to college for theater who’s going to care? If it’s for an accounting degree, probably not. Political science, with an intention on being a politician someday, sure. A law degree; absolutely.

Then there are the advanced degrees one has to think about. Is a master’s degree from Yale really all that much different than a master’s degree from UCLA? Aren’t both big name schools? And won’t the degree from UCLA not only cost thousands less, especially if you live in California, but you’ll also be in better weather?

In any case, if you or a family member is still looking to go to a big name college, you need to have a plan for attacking the debt once college is over and the student is ready to go into the workplace. You also need to figure out way in advance the potential income ratio matched against how much it costs to go to school.

In today’s economy, if the student is getting a master’s in education and want’s to be an elementary school teacher, it’s going to be hard come close to earning enough to pay off a college loan. If the student is going for a doctorate and hoping to land at a major university, there’s a possibility, but nothing’s guaranteed.

The same goes for the medical field. Specialists such as a heart surgeon will easily be able to pay back the loan in good time. If the hope is to be a general practitioner, it might take working 12 to 14 hours a day to have any chance of keeping up on the payments; so much for luxury living.

Parents and students need to be realistic in protecting the student from crushing debt after graduation. There are many good colleges that one can get a very credible 4-year degree from. Many of those same schools offer competitive pricing for masters degrees as well. It’s something to think about for the future.