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Home » Student Life » Should You Go Back To School If You’re Still In Debt?

Should You Go Back To School If You’re Still In Debt?

Updated: February 11, 2020 By Robert Farrington

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Should you go back to school if you’re still in debt?

This is one of those questions that can be tricky to answer , right?

We are going to break it down in this post and attack the question from many angles.

Here we go.

Should you go back to school if you dropped out of college and still owe on student loans?

Should You Go Back To School If You're Still In Debt?

If you dropped out of college for one reason or the other and have made the decision to go back and you intend on borrowing money to do that, it is important that you would have kept up with the payments to be eligible for more money.

In other words, if you have not kept up with paying your previous loans and you plan on going back to school, now is the time to get your loans back in good standing.

Until your loans are back in good standing, unfortunately, your decision to return to school and pay for it with student loans will have to be delayed.

Action Steps to Getting Your Student Loans Back in Good Standing

While it varies from lender to lender, in general you will have to:

  • Call your student loan lender and discuss with them that you would like to go back to school and thus would like to get your loan out of default.
  • In most instances, getting your loan out of default will require you to make a payment of a certain amount and/or consistent payments over a certain period of time. For instance, paying a stipulated amount for the next 6 months could get you out of default.

  • Once your loan payments are back in good standing, discuss with your lender what other arrangements you can make so that you can get the money you need to get back to your education.

(Note: Take a look at the different income-based repayment programs available to you under the federal program or maybe look into side hustling to pay them off faster?)

It is also possible for you to apply for a deferment if you are studying at least half-time at an accredited college.

You can call up your lenders, show proof of the fact that you are attending school and fill out the necessary paperwork for a deferment.

Your chances of getting a deferment increase if your previous loans are in good standing.

Should You Back To School If You Graduated But Are Still In Debt?

This situation can be argued for and against on several levels.

There are instances where going to back to school even though you are in debt is the right decision.

If you are going into a professional vocation like medicine, pharmacy, dentistry, nursing, education or engineering, going back to school after you have incurred debt as an undergraduate can be a smart move.

The skills in this profession are very specific and there tends to hardly be a shortage of high-paying positions.

The ability to snag a job almost immediately after graduation and high-income earning potential of these professions - thus increasing the chances of paying off loans quicker would therefore be the argument for going back to school in this instance.  

If you are not in a professional vocation like the ones named above, it might be beneficial for you to further your education if a higher degree significantly increases the chances of you getting into a better position.

The truth is that, sometimes a master’s degree or doctorate might be the barrier to entry for a particular field.

If there is no getting around that and there is indeed an assurance of better income opportunities after you have graduated , then going back to school while you are still in debt is not a bad idea.

If your education is completely paid for. This is a no-brainer. If your company has agreed to foot the bill for furthering your education, or you have won a grant or scholarship that covers all your educational expenses, there is no reason not to take up the opportunity even if you are in debt.

When Is It Not A Good Idea?

Hardly will you read on this blog a suggestion to simply quit your education.

This is a blog geared toward helping you excel in your financial life while getting an education after all.

However, there does come a time when furthering your education while you are still in debt will put further stress on your financial situation.

We want to avoid that.

  • Where there is no guarantee that further education will get you a better job. It might be safer to seek “informal” modes of education like certifications that are offered through professional organization or even through online courses that tend to focus on increasing your employable skills. Online courses through Coursera and websites like DataCamp for instance can help you increase those skills dramatically.
  • Where it makes no financial sense for you or your family at the time. If you are currently in a season where financial resources in your home are extremely limited, this also might be an indicator for not going back to school.
  • There are instances where you may no longer qualify for federal loans because of the amount you have already taken out. Your only option then is to get a private loan - which tend to have high interest rates. Again, this could create stressful financial situations.

Closing Thoughts

Like I said at the beginning of this post, there is no simple answer to this question.

At the end of the day, you will have to take stock of your overall life situation and determine if going back to school makes financial sense in the long-term.

The points raised in this post are intended to be guideposts in helping you reach those decisions.

Would you consider going back to school if you're still in debt? Your thoughts are welcome in the comments.

Robert Farrington
Robert Farrington

Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.

He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.

He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.
Comment Policy: We invite readers to respond with questions or comments. Comments may be held for moderation and are subject to approval. Comments are solely the opinions of their authors'. The responses in the comments below are not provided or commissioned by any advertiser. Responses have not been reviewed, approved or otherwise endorsed by any company. It is not anyone's responsibility to ensure all posts and/or questions are answered.
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