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Considering 'Good Debt' And How to Use It
Tweet Share on Facebook April 27, 2011 Comment (1)With all the attention on the growing menace of educational debt, there is an irony to "investing" in higher education. Excitement turns bittersweet when faced with borrowing money to fulfill this dream.
Educational debt is often described as "good debt": Those with a college degree earn significantly more than high school graduates over a lifetime of work, making borrowing large amounts worthwhile. As we previously reported, the Project on Student Debt estimates the average debt for 2009 bachelor's recipients is $24,000. Students with advanced degrees carry an even heavier burden: Amounts can exceed $100,000 and take decades to repay.
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Pell Grants Survive Federal Budget Process
Tweet Share on Facebook April 20, 2011 Comment (7)Details continue to trickle out about the federal budget compromise negotiated last week. One piece of good news is that the bill provides $23 billion in funding for Pell Grants and maintains the maximum grant at $5,550.
But the bill does eliminate the so-called "two Pells" program, which allows students to get additional Pell Grants for summer enrollment. With Democrats and Republicans already preparing competing budget proposals for 2012, now seems like a good time to review the Pell Grants program.
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Take Another Look at Student Debt Consequences
Tweet Share on Facebook April 13, 2011 CommentIn last week's post, "Remember the Student Debt Factor," we discussed the importance of thinking about your educational debt burden as one of the key factors in deciding where to go to college. This week, we'll take a more in-depth look at the long-term fiscal consequences of being burdened with a large amount of educational debt.
Jane Median and Sam Spendthrift are fictional college students. Both did very well in high school and were accepted at a wide variety of schools. Jane Median chose to stay in state and attend a four-year public university. She will graduate with $24,000 in educational loans. Sam Spendthrift chose to go to a well-known four-year, private university. In addition, he used his loans to pay for spring break, rarely cooked at home, and bought a new laptop with his loan money. As a result, he will graduate with $52,000 in student loans.
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Remember the Student Debt Factor
Tweet Share on Facebook April 6, 2011 Comment (1)It's that time of year when high school seniors and graduate school candidates are making their final decisions of where to go to school. There are many factors that come into play in these decisions.
Unfortunately, one of the most important factors—how much debt you will have accumulated when you graduate—is often not on the radar screen. It may be the last thing you want to think about, but factoring the amount of student loan debt you will have into your decision can pay huge dividends after you graduate.
