Published June 13, 2012
Young people are known for going their own way, but college students may regret bucking one recent trend.
At a time when most forms of consumer debt have been declining, the amount of student loan debt outstanding has been rising rapidly. With tuition costs soaring at many colleges and an interest-rate hike potentially around the corner, how can you ensure the return on your education investment is worth the cost?
Doing some homework before you finalize your course of study may be the key.
Getting 'payback' on your student loans
Paying for education is often said to be an investment in the future, but an investment is only as good as the return you get on it. One way financial professionals assess an investment opportunity is to measure the payback on the investment -- the amount of time it will take for the investment to earn the amount spent on it. A good payback is obtained by minimizing what you spend for an investment and maximizing its earnings.
Here are five ways you can improve the payback on your investment in student loans and other educational expenses:
Student loan trends
Weighing your college education's benefits against its costs may be more necessary than ever today. Recent first-quarter data from the New York Federal Reserve Bank demonstrates just how rapidly the student loan debt problem is growing:
In many cases, young people have turned to colleges and vocational schools as an alternative to facing a hostile job market. While this can help you obtain skills that make you more competitive in the workplace, that only helps if you learn skills that are in demand and choose a college with a respected reputation.
Handled pragmatically, an investment in education can help you increase your earning power over the course of your career. However, without the right planning, racking up student loan debt can leave you spending too much of that career trying to dig out of a hole.
The original article can be found at Money-Rates.com:
Getting more from your student loan investment