President Biden has tried to reduce the burden of student debt for federal borrowers. To that end, he introduced a plan that would forgive up to $20,000 in loans per borrower -- a plan that was shot down by the Supreme Court about a month ago, causing many borrowers a world of distress.
If you're currently enrolled in college, you may be thinking of dropping out in light of this recent ruling. After all, if your chances of having your student loans forgiven are pretty slim, then why put yourself through the hassle of having to repay them for years? And if you drop out now, when your loan balance isn't as high as it could be, you'll potentially minimize the damage.
It's easy to see why you may feel discouraged about the idea of paying off student loans, to the point where you're ready to drop out of school. But not completing your studies is a move you might sorely regret. Here's why.
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You might struggle to repay your existing balance
Maybe you're only halfway through college and have borrowed $20,000 to get there. Sticking with your studies for another two years might result in a total student loan balance of $40,000. And, well, a balance of $20,000 will be easier to whittle down than a balance that's twice as large.
But if you don't complete your degree, you might struggle to find a job that pays you a high-enough wage to whittle down your loans in short order.
There's lots of data pointing to the fact that college graduates are generally poised to earn more money in their lifetimes than those without a degree. Of course, there are exceptions. But the Social Security Administration says that men with a bachelor's degree earn roughly $900,000 more in median lifetime earnings than those who are only high school graduates.
Not shockingly, the numbers look different for women, likely due to the ever-present wage gap. Even so, for women, a bachelor's degree can result in a median of $630,000 more in lifetime earnings. That's a big difference.
Your debt might get forgiven, anyway
If you're in college now and aren't planning to enter a particularly lucrative field, then you may be worried about the idea of repaying your student loans, even with a degree in hand. But remember, just because Biden's recent student loan forgiveness plan didn't come to fruition doesn't mean the concept of forgiveness no longer exists.
Several federal student loan repayment plans come with an eventual forgiveness option. And President Biden's newly introduced SAVE repayment plan could allow some borrowers to be debt-free within 10 years.
As such, before you rush to drop out of college, consider the difficulties you might have in repaying your existing student loans without finishing up your degree. And look into the different options that continue to exist for having student loan debt forgiven.
The recent SCOTUS ruling may have dealt a lot of borrowers a harsh blow. But that doesn't mean you're doomed to be saddled with student debt forever.
