While there are a number of good reasons to take out a loan for college, there are also many poor reasons. Because college loans often take decades to repay, you should generally avoid going into debt for classes which don’t count:

  • toward a degree,
  • for a degree with a low return on investment,
  • for unnecessary expenses not supportive of your education,
  • for overpriced institutions when other options are available,
  • when you can pay for college through other means.

Think Twice

First, think twice before you take on debt for classes that don’t count toward a degree. Unless those classes will pay for themselves in job-related skills, you probably shouldn’t take out a loan to cover those classes, no matter how exciting the course title and description may be.

For example, classes in the history of movies or in video game design may sound like fun, but unless you’re going to be a movie producer or game programmer, such courses probably won’t help you pay the bills.

Consider Your Options

Second, you should consider your options carefully before taking out a loan for a degree with a low return on investment. From a pragmatic standpoint, degrees in education such as my own, for instance, are often not very lucrative. Because of this, you should carefully consider how long it will take you to pay off those loans based on a projected income.

On the other hand, some professions which don’t pay well—such as education—are often personally rewarding. If that’s the case, you may decide that taking out a loan is worth it to pursue your calling.

Avoid Unnecessary Expenses

Third, you should usually avoid using school loans for unnecessary expenses. Some purchases, such as textbooks and computers, are certainly worth purchasing on credit—especially if you can’t afford them otherwise.

Other expenses, such as the latest backpack or a trip to Europe, are likely splurges that you won’t want to continue paying for decades later.

Weigh Tuition Costs

Fourth, before signing up for college loans, you should carefully weigh whether you’re paying a reasonable tuition for the education you’ll receive. Because educational options abound, you ought to investigate those options before deciding to invest.

If your dream college offers exactly what you’ve been wanting for $40,000 annually while another college offers a comparable degree for $10,000 a year, you should ask yourself whether that college name or specific degree will make a $120,000 difference for a four-year degree.

Find Other Support

Fifth, you ought to avoid debt when you can pay for college through scholarships, grants, or even in cash. Well before choosing a college, you should begin applying for scholarships or grants.

As financial guru Dave Ramsey has told his callers, you should make applying for scholarships a regular part-time job during your senior year.

During the process of applying for college, also make sure that you submit a Free Application for Federal Student Aid on time to see whether you qualify for any grants.

And, of course, if you—or that rich uncle—has enough cash on hand to pay for college, you’d be far better off investing what you’ve saved rather than borrowing from your future. At the same time, you should keep enough cash aside for necessities and emergencies.

In short, you should do your best to pay for college through other means—if at all possible.


In a day when college debt seems unavoidable, there are ways to avoid racking up a debt load that will take years to repay. Though there are some good reasons to take out a loan, you should avoid college loans if you can.

When you can’t, use wisely what you’ve borrowed by taking classes that relate to your degree and offer a high return on investment and avoiding unnecessary expenses, including unreasonable tuition rates.

Make a wise investment in your future, not one you’ll be paying on till your children begin college.