Cost is, and should be, a significant factor when somebody chooses a college. But why do we have anxiety about taking out loans to pursue a college education and question whether or not a degree from a high-ranking school is worth the student loans that come with that degree, but then have such few qualms about taking out a significant loan for a car. Does that mean that a car is more valuable than a college education?
A car can be seen as a necessity to your everyday life, especially if you live in a city that doesn’t have a public transit system that’s as developed as New York, D.C., or Boston. Recently, new car loans have hit record highs, with the reported average amount financed on a new vehicle in the fourth quarter of 2012 being $26,691. Meanwhile, college graduates can have as much debt as $120,000 in student loans after graduation.
A college education and a car loan might seem like an unconventional comparison.. The debate surrounding the necessity of a college degree is a hot one, especially with the student loan debt growing larger every day, with more than $1 trillion in student loans outstanding in the U.S. Much of the debate revolves around the rising price tags associated with higher education and the questionable ROI on a college degree. PayScale’s College ROI Report can help you predict monetary ROI, but there are other benefits as well. A college education exposes students to new learning styles, professors that have the potential to become lifelong mentors, and resources that may not be available to them otherwise.
In an economy where unemployment numbers are high and there is fierce competition for even the most entry-level jobs, a college degree can get you further than simple professional experience. While a college degree doesn’t guarantee you getting the job against other competitors, it will give you a better chance. So with the student loan debt soaring, parents and students undoubtedly can have a hard time making the decision to take the plunge or put their investment elsewhere. It may seem that the car loan you take out is smaller than student debt, and easier to justify since it can be a necessity for employment and just standard of living. If the sheer size of a student loan is what is making you question whether or not you should attend college, think about the future benefits of each purchase. Why is one so much easier to justify than the other?
A car can have an expiration date based on the miles you drive it, and you’ll have to take out a new loan on a new car once that one dies. A college education only improves with the amount of time and energy you invest in it, while creating a lifelong enrichment of intellect and higher earning potential.
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