Are Student Loans Worth It? Evidence From Graduates Should you borrow to go to college? Its just one of countless decisions youll make about your education, and one of the most confusing. Borrowing could potentially open doors, but it might also backfire later. So what should you do? A long-term investigation into the salaries of science and engineering graduates provides some major food for thought. In short, student loan borrowers earn less money than non-borrowers -- but not for the reasons you might expect. Its all about grades The researchers found that the single biggest factor that affects salaries is differences in grade point average. Borrowers have worse grades than non-borrowers, and its the most significant reason they earn less after graduation. In other words, lower earnings for borrowers dont come from things like demographics or financial constraints that force borrowers to go to worse schools. Though program quality matters a little bit, in the end its mostly about grades. This is most powerfully illustrated by looking only at disadvantaged students, who all face similar financial pressures, and comparing borrowers to non-borrowers. Borrowers are 50% more likely to attend a higher-ranked program or private school, which means that they appear to place a larger bet on the benefits of those programs for their futures. The results in a nutshell? Disadvantaged non-borrowers -- who attended worse schools, mind you -- leave college with salaries over 10% higher than borrowers. Again, the majority of the reason came down to GPA. Borrowers had drastically lower grades than borrowers, which completely wiped out the potentially positive effects of going to a great school. Why do borrowers have worse grades? The question of why borrowers perform worse is open to debate. Perhaps the financial stress of a debt burden means they need an extra job, or maybe, as I suggested, borrowers are overestimating the importance of school quality on their employment prospects. The researchers also suggest that student borrowers could be facing more pressure when they go to the job market, leading them to take a lower-paying or more secure job rather than holding out for something better. Another possible explanation, which Malcolm Gladwell explained in depth in the book David & Goliath: Underdogs, Misfits, and the Art of Battling Giants, is that going into a more competitive program isnt always in the students best interest. Gladwell cites research that shows that more competitive science, technology, and math programs have a higher dropout rate than less competitive ones: A 10-point rise in the average SAT score of incoming freshman brings a 2% drop in retention. As Gladwell puts it, The smarter your peers, the dumber you feel; the dumber you feel, the more likely you are to drop out of science. Or, perhaps in this case, the more likely you are to do poorly -- and suffer the consequences. The lesson: Reconsider borrowing The bottom line: Your grades matter more for your future than where you go to school. For a variety of possible reasons, borrowing reduces grades. So if you really want to set yourself up for success in college, you might want to avoid the student loans and simply do the very best you can academically. Get Admission in TOP 100 MBA Schools in the World!! NO ADMISSION NO FEE !! Doing an MBA is a life changing decision. use our MBA admissions advisory with a proven track record of acceptances to the worlds top MBA programs. Year after year, our clients’ acceptance letters and scholarship awards speak for themselves.For Details Call +91 9819811163 or Email immivisas@gmail
Posted on: Mon, 29 Sep 2014 05:05:24 +0000
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