Monday, January 31, 2011

Student Loans

I came across this article by following one of the commentators in the discussion section on Andrew Gelman's blog (it was the same discussion that Mark was recommending). Protoscholar is discussing financing graduate school and makes a very good point:

The last option, to be avoided if at all possible, is student loans. The U.S. government makes it incredibly easy to take out student loans to pay for school, but these things will haunt you for decades to come. Remember that they are not GIVING you money, they are LOANING it to you. You have to pay it back someday. If a starting assistant professor makes $50,000, it isn’t worthwhile to get the degree and graduate with twice that in loans.

Remember; loans cannot be gotten rid of with bankruptcy and have the potential to ruin your credit, your chance of buying a home, your ability to rent a place and a lot more. Figure out the cost/benefit of taking out loans. What is your starting salary likely to be? Are you stuck working for a university or can you go into private industry for a few years and make a pile of money that can be used to pay the loans off? Is your field notoriously underpaid? Think about these things before accepting the loans or plan on slaving to pay them off for a long, long time to come.

I wish more students would think about issues like this. Even with assistantships and so forth, it is difficult to complete graduate school without acquiring some debt (as life can bring up all sorts of surprises that cost money). Plus, it can be hard to live like a hermit for many years, especially if the school you are going to is in a large city (with the consequent expenses).

But I see a lot of graduate students finish with a surprising amount of debt; even if the degree is very marketable this can be a dangerous way to start life off.

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