To FAFSA or Not to FAFSA: A Former Student's View of Student Loans

It's getting to be that kind of year again--the time when you anticipate filling out your tax returns, sighing with relief, and then realizing that you're not finished with forms yet. If you're a student looking at loans, there's at least one more to go, the dreaded FAFSA. Up until a few years ago, I approached the FAFSA with some trepidation. It wasn't the form itself--that wasn't bad at all. The problem came when I thought about taking out even more money than I already had to finance my education. Was it really worth it? Would I ever be able to pay them back? Was I getting myself further and further into debt needlessly and uselessly?

I always filled it out in the end, partly because I felt helpless to get through school any other way, but also because I thought that what I was learning was not just interesting, but also important. For the last couple of years, I haven't needed to fill one out. However, I'm anticipating doing so again so that my husband can receive scholarships (he's going back to school part-time). When I thought about the question of loans from my current vantage point, I realized my perspective had changed.

Is it worth you?

It's hard to determine the value of education. I know this because, when I was first taking out loans, I tried. There's a possible financial value, though some would argue that those who get a college education don't necessarily make that much more money than those who don't. Sure, the difference ads up over time, but it's debatable as to whether that difference is worth the loans.

There are other potential areas of value. Your education may give you power that you wouldn't have otherwise. It may raise you above your peers and help you stand out. Or, the information you get might just be valuable to you. In the end, the real question here becomes, "Is it worth it to you?" Are you going to get something from you education that you wouldn't otherwise have? What is that and how valuable is it to you?

Will it always be worth that to you?

This question might be even tougher to answer. If everything works out according to your plans, then your loans will be worth it. But what if things don't work out? What if you can't get a job in your field and you have to take a job somewhere else just to make loan payments? What if you start working in your field only to find that, while you enjoy knowing the information, you don't actually enjoy applying it in the traditional way? Will they still be worth it to you then?

Finding even a partial answer to this question asks you to dig deeper inside yourself. What do you value? What do you abhor? Then, you have to use your imagination. Is this education that I value for X and Y reasons worth it even if it somehow puts me in situation Z, which I abhor? While you probably won't end up in a worst-case scenario, you could. Also, if you can say, "Yes!" to the question above, you have more assurance of being pleased with the choices you make now for many years to come.

What will it really cost you?

I wish I had known better just how much money I was taking out. It's hard to fathom $25,000, or $30,000, or even $78,000 when you're young. You have nothing to compare it to, so you don't know how this loan stands up to the value of other items you might want to purchase later, like a car or a house. Even when I was financing graduate school, I didn't have the life experience to know how much money I was taking out in loans. It's only now, when I'm looking at purhasing some of these bigger ticket times and when I've tracked my savings so I know roughly how long it will take me to save for those things, that I have any sense of how much my education is worth in terms of my work and my time.

All the same, my loans ended up feeling like a lot more money when I was paying them off than they did when I took them out. As I talk to other people, I hear this over and over.

Additionally, the number 1 thing I wish I'd known about my loans before I took them out is that student loans are a burden! They might well be a burden you choose to take up because it is worth bearing, but they are a burden nonetheless. You have to keep track of them. You have to work a little harder and not spend a little less so you can make your payments. There will probably be some purchases that get put on hold because you need that money to pay off your loans. They will influence who you work for and how much money you need to make. If you want to work for yourself, they will influence how many clients you need and how many hours you put in.

There's no way to escape any of these things; they're just true. They're not any more or any less of a burden than other things you might take on, like buying a car, purchasing a home, having children, or even getting married. For some reason, though, they aren't commonly thought of in the same category. They're seen as "lighter," somehow, and as less influential in the rest of your life. Since this actually isn't true, anyone who is considering taking loans out needs to know that they will pay for their education with more than money. Their time, energy, and freedom will be among the other items taxed in the repayment process.

How well do you handle money and stress?

Student loans are definitely not worth defaulting on. They can ruin your credit as easy as any other loan. If you can't remember to pay your credit card bill or your school bill on time, they might not be for you. Taking them out in the first place is one thing, but taking a hit to your credit score because of them is entirely another.

Also, student loans are a hassle. Even if you pay them online and don't receive any paper mail about them (like I do), they're a pain. I have to remember when they're due, make sure I move enough money into my transitional checking account to cover them, then make the payment. Because online payments can be slow, I have to make sure the money stays in my account until the loan company takes it out. Overall it's very do-able, but it's a pain to keep track of all those little details. If these sorts of things stress you out, it might be worth it to find another way to pay for school.

The End?

In the end, I'm glad I took out my loans. I wish they were lower, but my education was worth every penny. I don't necessarily get to make more money than I would have otherwise, but I have skills that help people and I see the value of my education every time I see someone make a breakthrough (cheesy but true)! I value education for it's own sake as well as for the sake of what you can do with it, so I'm pretty sure I'll always think that my decision to take out the loans was wise. I've worked hard and will have my loan paid off in less than two years from when I started making payments on it, and two years of work are worth my education. I'm good with money and able to keep track of details without stressing out, so the repayment process is not overly painful for me. I can bear the burden my loans cause and that burden is also worth it in light of what I've received.

If you've taken out loans, I hope you can say the same thing. If you're looking at taking out loans, do a little research before you sign your just might change your mind!

If you're looking at taking out student loans, here are some resources that might help:

Get Rich Slowly blog

    Is Education Always a Good Investment?

    A Rough Guide to Repaying Student Loans

The Simple Dollar

    Student Loans 101

    Student Loans and the Philosophy of Debt

Free Money Finance: How to Pay Off Student Loans While Building Wealth


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Guest's picture

One must remember, that filing a FAFSA does not only give you the chance to get loans, but also the chance to get grants. It may not be a ton of money, but it $4000 less that you won't have to take in loan form.

Guest's picture

I agree with Amanda, there is no harm in filling out the FAFSA. You can qualify for grants and your school uses the EFC to determine your financial aid package. Or you could receive work study funds.

And if you don't qualify for anything, it's not like it takes up too much time.

Guest's picture

Failure to define the acronyms. Some of us would love to know what FAFSA means. Not everyone has ever heard of this. I haven't and I would bet others haven't either.

Edit your article to please include what this is. EVERY acronym needs to be defined the first time it is used in any article.

Help us out....
Still wondering

Guest's picture

With all due respect to the commentator, if you don't know what FAFSA is then you aren't and have never been (at least in the last fifteen to twenty years) a college student, presumably the writer's target audience. The acronym is the primary name for the form in the higher education culture for practical reasons.

Furthermore, it's common for even the most professional web writers to leave acronyms undefined because of easy-to-use quick reference resources like google and wikipedia.

Guest's picture

FAFSA - Free Application for Federal Student Aid

Guest's picture

I am having a hard time with this statement:
"...I don't necessarily get to make more money than I would have otherwise...". It really peeves me when 'degreed' people claim they aren't necessarily making any more money than if they didn't have a degree, and they say it all the darned time. It's not your fault that I didn't get my degree when I was young, but believe me, you DO necessarily get to make more money than you would without it. It's like that old saying: If you think getting an education is expensive, you should try living without one! It's a nightmare out there trying to earn money without a bachelor's. We're not all real-estate gurus and some of us loathe sales. What's left is clerical (menial) junk. I'd rather have student loans and it looks like I'm heading that way!

Guest's picture

Of course degreed people don't make more money mowing lawns or flipping burgers, but they sure have the ability to get better jobs.

I am a teacher in Arkansas, and make 48,000 dollars a year. Could I make it doing something else? Yes. Would I have the job protection and pension of a teacher? No. Could I get it without a degree? Nope.

Guest's picture

nightmare to make devils whimper for mercy. . . .

Sarah Winfrey's picture

Amanda and Jenny--It's actually not widely known that the FAFSA qualifies you for grants, so thanks for pointing that out.  It is, however, most widely associated with loans (but you probably already knew that).

Guest #1--I'm sorry I didn't spell out the acronym (though it is only a simple Google search away).  In my defense, the article is geared toward those considering taking out student loans, which is a group of people who would know what it means and recognize it immediately.

Guest #2--I actually work a job that doesn't require my degree, and there are non-degreed people who work the same job who make more money.  The degree is relevant to my work, but I didn't automatically get any sort of pay raise for having it.  So I may have started out making a few cents more that I would have without a degree (and I really mean, a few cents).  Sure, it adds up over the years, but it will take a long, long time (between 40 and 50 years) before that makes it worth the value of my loans.

On the other hand, props to you for considering going back to school.  I know several people who have chosen that, and I think they're some of people I look up to the most! 

Julie Rains's picture

You and commenters have raised excellent questions (and provided great answers) and not just about whether education is worth it but about the FAFSA process.

I am learning about FAFSA for my children's education. Recently, I attended some sessions on getting into college with some brief discussions about financial aid. The focus was on college prep in general and this is being done in a helpful atmosphere where no one is selling anything -- at my church with people I have known for years and trust. Still I thought that the FAFSA discussion was misleading. Parents were encouraged to consider private schools in addition to public schools because aid is available; FAFSA can fill the gap between what you have and what you need. But there is a huge difference in getting a scholarship/grant funds + doing work-study vs. getting a student loan (though packages may include a mixture of all these things).

Also, I've written about student loans and paying for college here at Wise Bread: Stopping The Student Loan Debt Stress and 529 Plans; as has Mark: The College Cost Reduction and Access Act.


Guest's picture
Minimum Wage

Of course degreed people don't make more money mowing lawns or flipping burgers, but they sure have the ability to get better jobs.

I have a degree, where do I sign up for a better job?

Guest's picture

Whether a degree helps you get a higher paying job or not is, I imagine, completely dependent on the line of work. You obviously can't practice medicine without several years of higher education, but High School is most likely enough to be a mechanic.

Sarah, maybe some disclosure on what your line of work is would clear up any discourse about your statements.

I wouldn't be in school if it weren't for FAFSA. I'm almost exactly half grants/scholarships and half loans. I'm in-state and at a public school, so things aren't completely terrible... but graduation will be my first experience with debt.

I'm in school to be a product designer. It can be a self-motivated field, where work produced counts more than the name of the school you went to. My chances of landing a job with a large corporation will be better thanks to a degree, but there are plenty of self-made (and also degree holding) designers working freelance and for studios. I'm convinced that, in college, I'm getting training and knowledge that I'd have a slim chance of getting on my own, but it's not impossible. So to me the debt is completely worth it.

I really enjoyed your post Sarah, thanks for sharing your experiences.

Guest's picture
Minimum Wage

Guest said:

It really peeves me when 'degreed' people claim they aren't necessarily making any more money than if they didn't have a degree, and they say it all the darned time.

Actually, I'm NOT making any more money with my degree than if I didn't have it, and I think I can prove it.

I earn my state minimum wage, which is pretty good evidence that I'm not making one cent more than I would make if I didn't have a degree.

Guest's picture
Guest (again)

minimum wage said:

"I earn my state minimum wage, which is pretty good evidence that I'm not making one cent more than I would make if I didn't have a degree."

Is that by choice or necessity? If necessity, I'm sorry the job situation where you live is so crappy.

Of course there are exceptions to the exceptions to the exceptions...a person could have a degree in, say, accounting, but absolutely love sales, and excel in that (partly because they love it). A person could have zero college education and thrive in sales and turn into Anthony Robbins overnight. My point is that if you have a degree and have a family or kids to support, or just flat need to earn a decent wage ($25 and up, by my standards), you are at least CONSIDERED for albeit loathesome executive-level jobs in many instances, because you have a degree. The rest of us have only clerical (reception, admin), labor, or sales to choose from. Again, I'm sure there is the very rare exception out there, but I've been trying (unsuccessfully) to prove that theory wrong now for 5 years.

But before anybody says to me "Boo-frickety-hoo, stop whining", I am going for my degree (in a science field you can't work in without the relevant qualifications), and am happy about that decision, even if it means getting loans or coughing up the dough myself through 2nd and 3rd jobs.

Guest's picture

I don't think a good decision can be made about this without considering what kind of education. Are you taking out thousands of dollars in loans that you would never be able to discharge even if you went bankrupt, in order to major in Philosophy? Art History? Anthropology? English or History but you don't want to teach? I'm saying this from the perspective of someone who has degrees in a low-paying field. Fortunately, I was able to work some, get grants and a fellowship, and end up with a minimal amount of loan to pay back after grad school. I was just barely able to pay back what little I borrowed. I had fun in school, loved almost all the courses, and gave little realistic thought to the money I might make in my field. I enjoy the work, but having a lot of debt would have sunk me. Taking out big loans would have been a fatal mistake.

Guest's picture

I went to school years ago on federal loans and didn't know what FAFSA was, but that didn't impair my ability to get the gist of the piece.

What isn't mentioned that I wish I had known is that you don't get the full amount of your principal. For every $1K I was awarded I paid upfront costs for things like processing and default insurance to the tune of a couple hundred bucks. Later, of course, I got to pay back the full $1K plus interest. That's one major factor in feeling like the loans have more heft when you pay them off than when you spend them.

I paid off my loans, but haven't seen the dollar-for-dollar return on that investment. On the other hand, I can see how I have choice and social cache. CNN recently reported that my children should be steered to jobs that can't be outsourced. That's pretty much service and vocational work.

Guest's picture
Guest (again again)

Your job may have been outsourced, and the student loans may have been a real bind. However, you're still better off NOW with any degree when it comes to applying for jobs today, than without a degree. I'm not talking about only within your chosen field, and I know that for example, technical writing doesn't pay what it did in 1999 due to outsourcing, but your degree earns you entrance into a higher-paying level of occupations. You may very well despise these possible job options, but it's better than being homeless/destitute. At least you have that choice. Without a degree, you're pretty much SOL.

Guest's picture

I've almost never had a problem getting a job, even ones that I wasn't qualified for, thanks to the degree from a big-deal college. It opens doors. I've been hired to do many things for which I'm not just underqualified, but basically unqualified -- people just kind of trust that you can learn it quickly, because it's like college work: editing, organizing, planning, etc. Of course, my performance at work is fine to great, and I do have some leadership skills, but, ultimately, I'm not really career driven, or even good at making money. If I only had a HS diploma, I'd be working at a record store, or maybe cooking at a diner, or doing something with computers, as I do now, but at a locale not nearly as interesting and pleasant as my current environment.

Access to a good work environment really matters, because, even though I'm near the bottom of the ladder, I'm constantly checked out to see if they want to pull me up the ladder, or onto another ladder. Why? The degree. My degree (and generally good track record) can become part of their "team" and help boost the team. That's where the prestige of a fancy school helps, and makes it worth some of the extra money - that is, if you qualify for scholarships, go to a public ivy, or have rich parents. So, without much effort above and beyond working hard, doors open for me.

So, I'm looking at getting another one of those degrees. Maybe another BA, if it's cheap enough. It seems to help to have two of them.

Some people make fun of me for being soft and lazy, but, hey, it's great living and I wish everyone could have the cushy low-income, highly-intellectual life. I'm all for working hard, but, frankly, people doing a lot of these service jobs are getting abused by their bosses and the system. They're ruining their bodies and minds so a bunch of jagoffs can have a fancy coffee or cheap lunch.

Guest's picture

Oh yeah, another thing - to Minimum Wage - if you have a degree, there are a few jobs you can get that others cannot. You can teach - and in some cities this pays quite well, and has great benefits. You can also edit. This doesn't pay so well, but it's well above minimum wage, and the job itself isn't that hard. The other stable jobs you can get are a paralegal or a bookkeeper. Neither are fun, but, so what? There's usually a career track and the money gets to be good. You can have any degree, pretty much, and find some job if you just hammer away at those four things. And, once you're in the job, you'll understand why :-)

Guest's picture
Current Graduate Student

I have used the FAFSA to help fund both my undergraduate and graduate education-- without taking out huge loans.

Federal and state aid, at least for the most part in Washington, is determined through subtracting the EFC (Expected Family Contribution) from the COA (Cost of Attendance). The remainder is one's Unmet Need. From the student's unmet need, the school's financial aid counselors will award either subsidized or unsubsidized loans, grants, and/or work study.

In my opinion, and through my current experience... you have to understand the FAFSA process before accepting any awards. Look at the interest rates of each loan offered to you, and whether or not they are subsidized. If you are planning on teaching (as I am), Federal Direct and Perkins Loans can be partially forgiven. Place yourself on a work study waiting list if you are eligible. Earnings under the work study program are not counted against you on future FAFSAs, which decrease your EFC.

The FAFSA does not award scholarships, yet some departments and scholarship donors use financial need as a basis for selecting their award recipients. Other times, schools will provide tuition waivers based on academic achievement and financial need.

The moral: There are options past checking "yes" to loans year after year! Talk to the financial aid counselors at your school. Each student is assigned a counselor whose job is to find the best option for every student on making higher education affordable.

Guest's picture

In general, you should complete the fafsa form. There is no reason why someone should not take out the subsidized stafford loan - the government pays the interest while you are in school. Free Money!!!

There are a couple of good sites to help you in the process: - the official government website - Check the financial aid section, and - Free Info on completing the FAFSA

One tip - Apply early and start applying for scholarships soon after. Scholarship money is often limited - first come, first served...