Going Back to School but Still in Debt? Some Questions to Ask Yourself

Especially for young people who graduated in the midst of the Great Recession—and maybe for some who are about to graduate during the Season of COVID-19—the last few years have been a tough time to be entering the job market. Many new graduates came out of college holding a ton of student loan debt along with their freshly minted diplomas and not a lot of prospects for the higher-paying jobs that they went to college to qualify for. It can be a real Catch-22.

Some may be considering returning for more education—a different undergraduate degree or possibly graduate work—in order to gain entry to a more promising career field. For many in this situation, there’s still the problem of student loan debt. Does it really make sense to go back to school if you’re still paying off debt from your previous student days?

The answer depends on your answers to a few questions. Let’s take a look: 

  1. Are your loans current? If they’re not, then your first order of business is to get them that way. Contact your lender to find out about options for getting your debt back into good standing, or go to studentaid.gov and learn about how you can get your loans out of default.
  2. Will your new degree increase your earning power? If you are looking at a professional school such as medicine, law, or something similar, the prospect of a higher income after graduation may balance out the increase in debt. This is a cost-benefit analysis that you should review carefully, because before you take on more debt, you need to have a sound plan for paying it back.
  3. Can you continue working while attending classes? For some degrees—medical school comes to mind—holding down even part-time employment while keeping up with your studies can be a stiff challenge. But if you are serious about getting ahead and taking on as little debt as possible, the more cash flow you can generate while in school, the less debt you’ll have to take on (and repay later). There’s even some evidence that working while in school helps some students make better grades.
  4.  Are you eligible for grants or other non-loan financial aid? It could be worth your while to see you qualify for various grants or federal financial aid. Start by filing a Free Application for Federal Student Aid (FAFSA). Federal loans, backed by the US Department of Education, are typically more favorable to the borrower than private loans, so if you need loans to finish paying for school, these should be your first recourse. the FAFSA is also a gateway to finding grants—funding that you don’t have to pay back—to pay for your education. You can also visit the Sallie Mae student finance website to learn more about grants that might be available to you.

Paying for a good education is the most important investment you will probably ever make. But don’t go in blind; carefully consider these questions and do your research. And if you are a parent or grandparent with questions about college planning or other education expenses, I can help you find answers; please get in touch. You can also click here to read my recent article on 529 education savings plans, click here.

Stay Diversified, Stay YOUR Course!



Empyrion Wealth Management (“Empyrion”) is an investment advisor registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940. Information pertaining to Empyrion’s advisory operations, services and fees is set forth in Empyrion’s current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Empyrion. The information contained in any third-party resource cited herein is not owned or controlled by Empyrion, and Empyrion does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Empyrion of the third party or any of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner or investment advisor.

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