Is College Debt Worth It: What You Need to Know Before Taking Out Student Loans
Let me start by saying this: debt is bad.
Debt should be avoided at all costs. In an ideal world, you would have enough money to pay for what you needed without taking out loans. Unfortunately, we don’t live in a perfect world, and sometimes exceptions have to be made.
That being said, college debt is probably the worst type of debt you can get yourself into. Student loans can stay with you for years after you graduate, ruining your financial future.
So, is college debt worth it?
In 99 out of 100 times, it’s not worth it. I can answer that for you right up front.
In this article though, we’re going to talk about potential scenarios where it could be worth it.
Let me be very clear: I won’t be advising you to go into college debt or take out hundreds of thousands in student loans. I’m going to be giving you scenarios, and we’re going to think about cases where it might be worth it.
What You’ll Learn After Reading This Article:
How college debt and student loans work.
How to evaluate cases to see if college debt is worth it.
Answers to frequently asked questions about college debt.
How Student Loans Work (And the Difference Between Fixed vs. Variable Rates)
Before we get into scenarios where college debt might make sense, it’s important to understand how student loans actually work.
When you take out a loan, you’re not just borrowing the money — you’re agreeing to pay back that money plus interest. And the type of interest you sign up for can make a huge difference in how much you’ll end up paying long-term.
There are two main types of interest rates you’ll see with student loans:
Fixed-Rate Student Loans
Lock in the interest rate for the life of the loan.
If your rate is 5%, it’s 5% until the loan is completely paid off.
Benefit: stability. You know exactly what your monthly payment will look like every single month.
Downside: if interest rates drop in the future, you’re stuck paying the higher rate unless you refinance.
Variable-Rate Student Loans
Change over time depending on the market interest rate.
Payments could start out low but rise later — sometimes by a lot.
Benefit: if rates stay low, you might pay less in interest overall than you would with a fixed loan.
Downside: you have zero control. If rates jump, your payments can become unaffordable fast.
👉 Key Point: Student loans aren’t just about the amount you borrow — they’re about the total cost of the loan over time. A $20,000 loan at a fixed 5% rate could cost you less than a $15,000 variable loan that spikes to 9% after a few years.
Now that we have an understanding of what types of college debt there is, let’s take a look at some cases where it might be worth it.
Scenarios Where College Debt Is Worth It
Again, I’ll put the disclaimer out there that college debt is usually never worth it, and even though I’m not a financial professional (and you should consult with one before making any big decision like taking out a student loan) I would try to avoid college debt at all costs. That being said, here are a few scenarios where it might be worth it.
Scenario #1: You Look at it as an Investment in Yourself
You’ve probably seen the advice many times to skip college and start your own business. This isn’t terrible advice, but it could involve you taking out loans if you’re going to be starting a business and don’t have enough money to pay in cash.
Of course, business loans are different than student loans because student loans stay with you forever, but it is a similar concept.
If you look at going to college as an investment in yourself and you understand all the ins and outs of your student loans and have a plan on how to pay them back, it might not be the end of the world to take out a loan.
The issue happens when you’re just taking out loans without any real plan, or your parent signs loans for you and you’re just an 18 year old that doesn’t have any clue what they’re getting in to.
Taking the responsibility of making college an investment and knowing you’ll need to put the work in could be a good thing. It could also give you incentive to find a part-time job while you’re in college to start paying loans off early.
Scenario #2: When the Career Requires a Degree (and Pays Well Enough to Justify It)
Some professions have a hard line: no degree, no entry. Medicine, law, engineering, pharmacy, accounting, teaching — these careers all require formal education, licensing, or certifications that you can’t obtain without going to college.
In these cases, borrowing money can be worth it if your future income matches (or exceeds) the cost of your loans. A registered nurse who earns $80,000 a year and took on $40,000 in student loans is in a very different position than someone who borrowed the same amount for a field that pays $35,000 a year.
The rule of thumb many financial planners use is this: don’t borrow more than you expect to earn in your first year out of school. If the numbers make sense and the degree is truly required for the field, the debt can be a worthwhile step toward your career.
Scenario #3: When You Keep Debt Low and Use It as a Bridge
Not all student loans have to mean six figures of debt. Sometimes, loans can serve as a small bridge to help you finish your education when you’ve already covered most of the cost through scholarships, grants, or family support.
For example, let’s say tuition is $15,000 a year and you’ve secured $12,000 in scholarships. That leaves you with $3,000 uncovered. Rather than walking away or delaying school, you could take out a small loan to cover the gap. Over four years, that’s less than $15,000 total — a manageable amount, especially if you’re entering a stable field like business, education, or IT.
This type of borrowing is strategic. You’re not taking on more debt than you need, and you’re positioning yourself to graduate on time without delaying your career. Used this way, student loans can act as a stepping stone rather than a financial burden.
Frequently Asked Questions About College Debt
Q: Should I take out student loans if I don’t know what I want to major in?
A: No. If you’re not sure about your major or career path, it doesn’t make sense to saddle yourself with debt. Instead, consider community college, trade schools, or working while taking classes part-time until you have a clearer direction. Debt without a plan is one of the worst financial moves you can make.
Q: Is it better to get federal student loans or private student loans?
A: Federal loans are almost always better. They typically have lower fixed interest rates, flexible repayment options, and protections like deferment or forgiveness programs. Private loans can have variable rates, fewer protections, and are often more expensive in the long run. Only look at private loans if you’ve maxed out federal options and still need additional funding.
Q: Can student loans ever be considered “good debt”?
A: The short answer: rarely. Student loans only make sense if the degree you’re pursuing has a strong chance of leading to a career with enough income to pay off that debt in a reasonable timeframe. Taking on $100,000 for a degree that earns you $35,000 a year is not “good debt.” On the other hand, taking on a manageable amount of debt for a degree that leads to a high-demand, well-paying career could be worth it.
Final Thoughts: Is College Debt Worth It?
At the end of the day, college debt is something that should be approached with extreme caution. For most people, it’s not worth it — and once you sign those loan documents, there’s no turning back. Student loans aren’t like car loans or credit cards where you can walk away through bankruptcy. They follow you for decades, and in many cases, they can prevent you from buying a home, starting a family, or building wealth.
That doesn’t mean there are zero situations where debt makes sense. As we’ve discussed, if your career absolutely requires a degree, and the numbers add up, then a loan can be a tool — not a trap. If you keep debt low and use it strategically as a bridge, you can graduate with manageable payments instead of a crushing burden. The key is to borrow only what you absolutely need and to make sure the return on investment is there.
If you’re considering student loans, treat the decision like a business move. Ask yourself: What’s the cost, what’s the payoff, and what’s the risk if things don’t go as planned? Talk to a financial professional before signing anything, and never rely on vague promises like “things will work out.”
Remember, the goal of education is to open doors, not chain you down. College can be a powerful investment in your future — but only if you’re intentional about the cost, the payoff, and the plan. Otherwise, what should be an opportunity can quickly become a financial nightmare.
So, is college debt worth it? For most people, the answer is no. But if you fall into one of the few scenarios where it is, just make sure you approach it with clear eyes, solid math, and a plan to pay it back.
If you need help trying to navigate through these decisions, your friends and coaches here at Your Career Strategy can help you. Click here to set up a free discovery call so we can help open your eyes to all of your options.