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Is a Degree Worth the Debt?


This guest post is from Christopher at, who started the blog as a way to be honest about his financial situation. Born and raised in Central NY,  Christopher was able to graduate with a degree in Finance, and soon after, he obtained his MBA as well. He continues to learn and grow and welcomes you to join him in his financial journey!

We have all heard the expression ,”You have to spend money to make money.” Well did you ever hear it mentioned in relation to college? Why should this be any different than anything else?

Sure we hear in the news all the time that college tuition costs are going through the roof, but there is also the uncertainty of Social Security in the future that we have to worry about. I don’t know about you, but I do not want to be working until I die; I would like to enjoy the fruits of my labor. With this in mind, we have to prepare for our future and potentially the future of our spouses and kids. I have seen time and time again where an individual has not saved enough throughout their career and is forced to work into their higher 60’s to low 70’s before they can retire.

You ask, “Is a degree worth the debt?” The average student loan debt for a student in 2010, according to The Project on Student Debt, was $25,250. This is quite a large figure if you look at it at face value, but think of the potential additional earnings for going onto college as compared to just a high school education.

Show me the Money!

How does $650,000 more than your high school counterpart sound after a 40 year career. With the way the economy is headed it may be longer if they increase the retirement age for Social Security.

If the income disparity hasn’t convinced you enough that you need a degree, what if I told you that you may have to save for your own retirement now. That’s right you heard it, according to analyst estimates the Social Security System may run out of money by 2022. We may need that additional $650k now to relax comfortably.

Take a look at what that $650,000 can do for your retirement account. We are going to bank the difference in pay between a high school degree and a college degree. Assume our portfolio will grow at a modest 5% annually. We are going to make annual contributions of $16,250 for the next 40 years. The power of compounding is going to bring our retirement account to a total of $2,061,146 after 40 years. That is quite a bit of money for going to college and saving all that additional income.

The bottom line is don’t ever sell yourself short and say you cannot afford it, because as you can see the degree will more than pay for itself over your lifetime. From one personal financier to another, compounding is powerful so make sure that you are saving to take advantage of it.

Your payments could be reduced: PPI Return calculator

What do you think about this? Would you take out a loan to get your degree?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I have a lot of friends who doen’t have degrees and make a ton of money. I have a degree but never went in that direction. I would say it depends on the path you want to go.

    • It always does depend doesn’t it? Life is one heck of a tough game.

      • Well put. It is a game. Sometimes you win and sometimes you lose but if you stay in it and watch to learn you win more.

  2. I do think a degree is worth it to a certain extent. I fully support going to school in your state to an institution that is moderately priced. Those private schools that charge around $40k a year are laughable.

    • @ Matt – I think it also depends on your career aspirations. If you are just using the degree to open doors then you don’t need the flashy expensive degree.

  3. For me, a student loan wasn’t a horrible thing. I wouldn’t be able to get into the financial industry without going to school, and sadly, my student loans were taken out.

    • I agree with you Michelle. Sometimes you just need the degree to open up that door for you.

  4. But what would the return on investment be if the person, instead of paying for college, took all of that money and invested it wisely and conservatively?

    • @ David – very interesting post. I worked up some numbers quickly to see what it would do. Assume we are going to a school that is 20k per year. So at year one we are going to just invest the 80k that we would have paid for the tuition over the 4 yrs. We anticipate a modest 5% return for the next 40 years. We would have at the end of the 40 years approx. $563k. This further solidifies the college route. This is general too, there are obviously exceptions to the rule where someone dropped out of high school and made millions.

      • Wouldn’t you also have to factor in the investor having an addition 4 years working and making money?

        • @ David you are very wise my friend!!! Yes that would have to be considered as well. We would also have to assume that the person who wasn’t going to college had 80k to toss into the market.

          • Fair enough. That would be a stretch for most 18 year olds.

  5. I believe the best path to choose is entrepreneurship, as technology is changing at such a rapid rate most degrees are outdated by the time they are finished. So I believe the school of hard knocks is the best choice.

    • @ Mortgage Broker – did you choose this path? If so, how has it panned out for you?

      • hey Christopher, the path that I chose in the end was University, I studied media. it’s not that I have regrets as I had probably the best 4 years of my life but I can’t help thinking maybe my time and money could have been invested better. I am also a big believer in mentorship I really think mentor is a viable alternative to years of student debt and studying outdated programs.

        • @ Mortgage broker – I have thought about that too. I wondered if I would be where I am at if I hadn’t gone to school and just went out to the work place. The world is a different place now from when our parents worked, it seems as though atleast what I perceive is that everyone has a college degree now. I went on for my MBA to differentiate myself. ShortRoadto down below does make a good point that your guidance counselors in school talk about great jobs that lie ahead if you go to college. They neglect to mention that you have to go to good universities to get these good jobs out of college. If you just go to the local 4 yr institution you will likely come out and start out making 30k. Just my thoughts.

  6. Well, if you only look at it from a financial perspective it may not be. But if you look at it from a career, door-opening, job choice perspective, it certainly might be. My degree has given me far more options than the investment might have been worth, but then again that was a while ago.

  7. @ Kris – Doors don’t shut and suddenly your voice is heard when you have a degree. You may have had the same voice before, but now you have the degree to support what you are saying. At the organization I work at, the upper management has advanced degrees beyond the bachelors, all of them. There isn’t a single manager here that doesn’t atleast have a bachelors.

  8. I think it really depends. I have my degree in communications and it helped me get my current job but the jobs between landing my degree and getting this one? I didn’t need it. I wish I would have been smarter and paid off my loans while in school. That’s the one regret I have about going to school and taking out loans.

    • @bogofdebt – I wish I had done that as well. Rather than taking out the additional monies so that I could have a good time in college. Oh wait, that wasn’t me. 🙂

  9. For the vast majority of college graduates, a $35k per year job awaits them. My first job was at a supermarket. After 3 years at the supermarket I was offered a manager’s job at 19 years of age, with a salary of $32k. I declined it and went to college. I graduated four years later. I got a job at an investment firm with a salary of $27k per year. I graduated with a 3.5 GPA. College cost $20k per year. Fortunately I got scholarships for 75% of the cost.

  10. Outside of engineering or medicine, I think a degree is useful for getting your foot in the door, but after that, you should have a good worth ethic to maintain employment.

    • @ Squeezer – It is sad that you have to spend that kind of money just to slide your foot in the door. Work ethic and your drive to succeed at your job is what makes you move up the corporate ladder.

  11. I absolutely, strongly believe in a 4-year college education as a foundation for someone after high school. The thing is though, the make or break decision is WHERE to go to school, in terms of choosing the right school. One must balance the interest in enrolling in the best school with tangible ROI realities. Value matters.

    • another bone I have to pick, would be the fact that here in Britain, over the last decade, we have lowered the level of the entry exam for universities which this has created a diluting of the bachelor degree honours. Do not get me wrong, I do like the idea that everyone has the right to go on to higher education, but we also need metal sheet workers and mechanics just as much as we need philosophers and Quantum Theory?

      • @ Mortgage Broker – so many universities and colleges here in america seems to have diluted the meaning of a bachelors degree. In the area or atleast the field that I am in, a great deal of people have an MBA and it just feels as though the bachelors is an extension of high school. Maybe grades 13, 14, 15, and 16. 🙂

    • @ Tie the Money Knot – You couldnt have said it better. When you are in a large metropolitan area, certainly it does matter when you are competing against the harvard grad, the yale grad, but in small town usa most employers only see that you went to college. Same applies to and MBA or any advanced degree as long as you can show that you have one in small town usa they dont really care where you got it from. So geographic location plays a role in it. An MBA from the local university doesnt have the same weight say in NYC that a Harvard one would have.

  12. I value my degree for more than just the ability to make more money. I learned a lot over the four years, had a ton of fun and made friends.

    • I learned a lot as well, more than just academic. I figured out a lot about myself and who I was. I came out of my shell as well.

  13. I think it’s different for everyone. My husband and I both have university degrees, and neither one of us use ours – however we did manage to graduate university debt free. I enjoyed university, but often think that I shouldn’t have gone… and I could have started my career 4 years earlier. A 4 year head start would have made a huge difference… especially if we’re retiring at 48.

  14. @ Julie – are you really retiring by 48? Wow that is amazing. Would you have gotten into the career you are in if you didn’t go to the university? And we all know hindsight is 20/20…I wish at the onset of college I focused on finance rather than taking Chemistry then jumping over to business.

  15. Math, science, engineering, technology, and medicine-track degrees are almost certainly worth the money — especially from a state university. Other degrees… probably not so much, at least on average — they’re always exceptions of course.

    It would be nice to see statistics organized by type of degree instead of the generic “college graduates earn $X and high-school graduates earn $Y”

    • Great comment LTR! I’m sure this will help quite a few people decide if going back to college is the right thing for them.

    • @ LTR – I would love to know it down to a by school level that would certainly help in making a decision to attend a college over another. Syracuse University makes on average X and Cornell makes on average Y…hmm food for thought.

  16. Thanks for writing and publishing this article. I am a great believer in education and that education is what we get from attending college (university). Emphasis is on ‘education’ because this is much broader than the degree we may get – universities and education are not only and not simply about knowledge and skills but also about the accumulation of cultural capital – and this transforms into other forms of capital.

    • @ Maria – thanks your appreciation means a lot.

      & Thanks Derek for publishing it!

  17. I think that it all depends on the degree you are seeking. For some, a degree is a waste of money. For others, it is necessary to get a certain job. I would urge many that a state school is just as good as a private school. There is no need to go into huge amounts of debt just to get a degree from a private school versus a public one.

  18. There are people who know enough already to succeed in their chosen field – most likely, pursuing a degree won’t teach them anything they don’t already know. But if you feel that getting a degree will help you get ahead in life, then by all means invest on it.

    • The problem is not knowing the information, it’s having that piece of paper. My co-worker is incredibly knowledgable and has been working for the company for 25 years, but whenever she applies to a job that she could easily do, they tell her that she’s “not qualified” because she doesn’t have her degree. Then, there’s me with my degree. I only have 1 years worth of experience and do not have near the knowledge that my co-worker does, and I could most definitely get an interview, and maybe even land the job. It’s really stupid, but that’s just the way the world is….

  19. ofcourse degrees are important even if you have to take some amount of loan for it..! but it will surely pay you off sooner or later as education is the only source which can make you get high paid salaries..!

    • The real question might be, “Is a salary the only way to earn a high wage?” What about business owners that are pulling in $150k a year and have no more than a high school degree? It is possible.

      • Yes it is possible for those business owners but you need to have some good luck for it not all the business man are successful i have seen people falling from the heights of earning to nothing getting bankrupt, it is always to have a safe side.

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