The Flip Side of Student Loans

We’ve all heard about the large amounts of student loans people have, and the negative impacts they can have on graduates, and especially those who took out loans but did not graduate.

A new study, though, shows the negative side of not borrowing enough. In this examination of a program designed to inform students about their loans, those receiving these educational messages ended up taking less money in loans to support their college experience. You’d think that would be good, right? Given what we hear about student loan debt.

But the worst result of student loans is those students who have loans but still drop out. They do not get the wage bump that comes with being able to look for jobs that require a college degree, but they still owe money.

The students who took less money in loans ended up performing worse in college. They ended up failing classes. This could be because they needed to work longer hours in order to support themselves without that loan money.

It’s true that student loans are sometimes hard to pay back. But if you could just borrow a little bit more (the students in this case took only $400 less in loans than the other students) you might have a huge payback in terms of being successful in college.