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Should You Take Out More Loans to Go to an Expensive School?

By Christy Bieber – Updated Feb 6, 2020 at 11:25AM

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Some schools cost much more than others. Are they actually worth borrowing for, or should you opt for a cheaper educational option?

When you’re pursuing a degree, chances are good that you’ll have a choice of educational institutes to attend. These schools can differ in many ways, from the degrees that they offer, to their reputations, to their post-graduation employment rates. 

Another key difference is cost. Some schools can cost tens of thousands of dollars more per year than others. Unfortunately, paying expensive tuition often puts these schools out of reach for most students without taking out federal and/or private student loans

Although educational loans may be available to most would-be students, if you’re thinking of borrowing more to go to a costlier school, you need to consider carefully whether taking on this added debt is worth it. Before you decide what to do, make sure you think about a few key issues. 

University campus

Image source: Getty Images

Is the more expensive school actually better than a cheaper alternative?

There are times when a school is more expensive because it has a lot more prestige, a specialized degree program, or a great reputation. But this is not always the case.

Sometimes a school is more expensive because it is a for-profit college. Unfortunately, many for-profit colleges don’t have their students’ best interests at heart and won’t necessarily open many doors for you in your career. Rather than borrowing to attend one of these schools, you will be far better off going to a community college with a far lower price tag. 

In other situations, a school may be more expensive because it’s private rather than public, or because of its geographic location. If the school has a higher price tag but doesn’t have a better academic reputation or a better program for your chosen career, then it is likely not worth paying for. 

Sure, you may want to attend that school in an awesome city that you love, but do you really want it enough to be in debt for the next 30 years? 

What is the potential salary increase that comes with going to a more expensive school?

Your choice of career also matters a lot when it comes to choosing a school. With some careers, you’re simply never going to earn a huge salary no matter where you attended school and earned your degree. In this case, splurging on a much costlier school, even if it has a better program or a better reputation, probably isn’t worth it.

If your salary is capped by your choice of profession, you don’t want to end up in a whole lot of debt that you’re going to spend your life paying back. This could result in a lot more financial stress, interfere with your other financial goals, or even make it difficult for you to actually do what you love because you can’t afford to make so little and still pay your loan bills. 

Will the costlier school actually make it easier for you to find employment?

In some professions, the school you go to will matter a lot because top employers tend to recruit from certain schools when hiring. If this is the case, and you get into a program at a school that’s almost sure to help you find good employment post-graduation, then paying for the costly school may be worth it. 

Most professions aren’t like this, though. So make sure you consider the post-graduate employment statistics in your field for each school on your list. Unless there are dramatically more people finding jobs after attending the costlier school, it probably isn’t worth paying for. You’ll be just as likely to get the same job if you go to a school that costs far less to attend. 

It often doesn't make sense to go to a more expensive school 

There are definitely times when going to a more expensive school pays off. This can happen if you’re going into a profession for which the prestige of your educational institution matters a lot and splurging on a big-name school means you’re likely to earn a much higher salary.

But there are many situations in which it simply doesn’t pay to borrow more just so you can go to a school that carries a higher price tag. If you simply can’t earn that much in your profession no matter what school you attend, or if the costlier school isn’t actually better, then there’s no point in borrowing more to go there.

Always remember that you will have to pay back your loans after graduation, so don’t borrow more than necessary, and focus on whether the return on investment is worth it when making decisions about how much student debt you’re willing to take on.


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