Are Student Loans Worth It? Check Out the Numbers on Student Loan Debt vs. Starting Salaries

According to, the average student loan debt among graduating seniors was $23,186 in 2007-2008.

That’s a lot of money, especially since it doesn’t take into account students who attended college but did not graduate. Chances are, many of those students graduated with debt and no degree to show for it.

While I personally believe that you can attend college without incurring debt, a common argument for taking out student loans is that you’ll be able to easily repay them once you graduate and make the big bucks.

But, how accurate are student’s estimates of how much they’ll bring home once they graduate? And how does that compare to their level of debt?

The infographic below tells the story. (Click to enlarge.)

Student Loan Debt vs Starting Salaries

Source: CreditLoan.


  • I do think they are worth it but not in every situation. It is obviously very different to graduate with the $23,186 average vs the six figure debt I hear about some people having.

    I agree it is hard to know what your starting salary will be coming out but you can often make some type of guess based on whether you are an art major or a engineering major. More importantly than major, take a hard look at your finances and financial aide package and think twice before going to a school that requires more than $30-40,000 in debt.
    Even with a really good job coming out of school that is a huge burden.

    • I think a lot of it depends on your situation once you graduate (assuming you do graduate or leave college) and unfortunately that’s not something you can really know until it’s too late.

  • I was surprised it the total was so low. The only people I know who graduated college with no debt had either their employer or their parents pay for it. The others owe a lot more than $23K.

    One thing this infographic doesn’t discuss is the problem of not finding a job or only finding one that you could get with no college education. A large percentage of young people have debt but no job. Even a modest debt could be a burden under those circumstances.

  • Wow! That is a powerful infographic. But I still think college is necessary for most people in order to succeed. The key is finding something you are passionate about and being able to live off that passion.

    • I think college is a big help in at least meeting the minimum standards for many jobs. (It’s pretty much standard practice to require a degree in many industries, even if you don’t actually *need* the degree to do the job.) Of course, it’s also great for people who are really interested in learning!

      I agree with you about success requiring passion!

  • kp

    Tuition fees have gone thru the roof last several years. If your kids decide to become doctor, pharmacist, engineer or any post-grad courses, expect to fork out 40k+ at most state universities and 60k+ at reputed universities. And that is after government subsidies and scholarships. Something is terribly wrong with the universities that were once accessible to average families, but now only rich families can afford them. We badly need reform of college education – and no pushing kids to community and internet colleges is not the answer – we need to make state universities and reputed universities accessible to average families..

    • I agree, tuition has certainly increased dramatically. My son will likely be attending the same school I did, but paying 4 or 5 times as much.

  • Heidi

    I’m employed at a vocational college as a financial aid director. Here’s the thing about student loan debt: It’s just like a car loan or a home loan. The more you pay, the faster you pay it off! I’ve had a car note for the same amount that my total student loan is for, about $22,000. The thing is, I paid way more per month for my car than I did toward my student loan! How crazy is that? According to it’ll take 10 years to pay off that $22,000 student loan. But I paid off my car loan in 4 years? Time to double my loan payments! Get that loan off my back! As for the question of finding a job in your field of study, diversify. The fact that you have a degree means that you are smart, cunning, and resourceful! Open your own business! Start a consulting gig. Do what you have to do in order to get those dollars flowing in. Maybe use your networking skills to start an online business! You folks are smart. The economy isn’t going to get better. We just have to get craftier!

    • You’re right, people do tend to hang onto student loans much longer than loans for cars. (Although sadly, some of the terms on car loans are pretty long as well.) Larger payments do make a big difference.

    • AM

      The fastest loans to pay off are the ones you don’t get. It maybe a little difficult to understand since your job depends on people taking out student loans. ;p

  • Heidi

    Also, Jackie what are your sources for the data used in the infographic shown above? The statistics that the Department of Education have released are much different than those you used. Thanks!

  • kiara

    Well, try $150,000 in student loans (from a public university) and only getting paid around $60,000 a year. Am I bitter? No, because I know the degree will lead to better things. Why so much debt? Well, because I have a doctorate degree. Wouldn’t you expect a higher salary? Well, yes, but it’s a Doctor of Veterinary Medicine degree and not a Medical Doctor degree. But, I don’t regret taking on those loans for a second. It does pay off to have a college degree even if you end up with student loan debt, because although today’s job market isn’t offering the best salaries, the degree opens up many more opportunities that will make you happier and lead to bigger and better things. That’s why you get a degree in the first place, right? Today, they’re asking for a 4 year degree for even low paying positions. But in the hope that things will get better soon, I think it’s a great investment in yourself that will often times lead to more opportunities that will make you happier despite having to make that annoying payment each month.

    • Kaira, are you just starting out? Or do you expect your salary to improve? That’s great that you don’t regret taking on the loans. And they sure do ask for a degree for many positions now.

  • Toreko

    Degrees do NOT make you happier! If you are motivated and have a direction or goal in mind that a degree will help you accomplish then by all means get it. However, I heard for years that a degree will = a higher paying job which will = either more happiness, or your life will be better, or if you don’t go running to a 4 year college right after high school you will be miserable forever. That is garbage!! Not everyone needs or wants a “high paying job,” which people think is synonymous with “good” job, but not if you’re miserable doing what you’re doing, these jobs require a lot of hard work, time, and stress too! I would highly advise that people don’t go to college to kill time or because people say you have to. I spent a $40,000 inheritance on a Bachelors Degree in business that I haven’t used for anything, and god do I wish I had that money today to pay for my condo and car. I am very happy at my full time job which pays $15/hr where I needed a high school diploma only and got it since I was the only one who applied.

    • Degrees aren’t magic answers, that’s for sure. It’s good to go to school for the right reasons, as opposed to killing time. You certainly don’t need a degree to get a good job, but they help open doors and allow you to apply to a wider pool.

  • Jesse

    I do not understand why student loan debt it looked upon as a bad thing. Look at it as cash flow, especially now that federal loans have income contingent repayment plans. Yes, someone may owe $40,000 and come out making $30,000 a year. Why is this bad? Take your payment and multiply by 12 and subtract from your salary. With an income contingent repayment plan, your payment will not be that much. So after student loan payments your income is at worst $32,000 a year. I really challenge someone to find a job for this much without a college degree?! People who state they did this are exceptions to the norm (which there are exceptions to EVERYTHING) or they never tried. I am also especially tired of people claiming to get through college with no debt. Honestly, you have an easy major, did not get an advanced degree in a field that really makes an impact, or you were given money. To those who keep touting an end to school loans, lets see if you say this when you get cancer and need treatments. Do you really think the smartest people to get through med school are always the richest and can afford it on their own? Do you really think these smart students should delay their education 10 years to work in a factory to pay outright? Do you really think with demands of professional school one can work while studying? The fact is, life happens. Yes, most people will likely go on to make a high wage, pay it back, and life happily ever after. However, because life happens, some very smart people will not be able to finish for family or health reasons and will owe alot of money. But this is why there are income contingent repayment plans. Why do most news articles like this write stories about the exceptions? Since life happens and some very well qualified people will have to drop out with major debt with no degree, should we not have doctors, lawyers, dentists, pharmacists, etc, to prevent that from happening? Of course not, so what really then is the point of this article? Again, its about cash flow. Pay it off quicker if you want, fine. But again, subtract your annual loan repayment off your wage if you decide to do the minimum and go see if McDonald’s will pay you that much. As far as the advice of just go start a business, please….your next article will be about people who start a business, fail like most businesses do, and owe debt on that – only this type of debt does not have such flexible repayment plans!

    • Personally, I dislike any debt, period. But I think student loan debt is often looked at as a bad thing by people who end up with say, a law degree but no law job, or a degree from a private school that they don’t use.

      I got my undergraduate degree with no debt, not because I had an easy major but because I applied for and won a merit-based scholarship that covered all of my costs. So I guess in that sense the money was given to me.

      I could have gotten my advanced degree with no debt, because my employer would have continued to pay for it. I decided not to work full time during my final year though, and took out a loan.

      There certainly are some advanced degrees where you can’t work while you’re earning them (architecture, veterinary medicine, medicine, and law come to mind.)

      At any rate this article isn’t about exceptions — it’s actually about averages. (Seeing how accurate student’s estimates are on average of how much they’ll bring home once they graduate, and seeing how that compares to their level of debt on average.)

    • AM

      “I do not understand why student loan debt it looked upon as a bad thing.”

      Because to starting out life at 22 with a net worth less than the day you were born really stinks.

      It affects everything starting out and frankly makes people far more willing to be debt slaves forever because they look at that mountain of debt throw in the towel so early on.

      When you owe money to anyone, you have to answer to them. When you earn interest, people answer to you. The dynamic is very simple. In my wildest dreams, we’d all put bankers out of business.

  • My wife and I each had student loans debts – totaling about $20,000. We got off pretty easy compared to most of my classmates who took on more than $20,000 by themselves.

    My wife and I are focused on paying back these debts and should have them all cleared by April, 2011! It’s been a crazy journey, but I’m happy to say that I see a light at the end of the tunnel!

  • Every situation is different, although, I will say that I never understand why people go to tiny liberal art schools and pay out of their own pocket or with immense loans, only to graduate with a communications, sociology, or pyschology degree. You can get just a good degree in those majors if you hit up a state school for 80% less on that tuition bill.

    How many kids actually graduate with the degree that they started with in the first place? There is an inforgraphic right there.

    • That would be an interesting thing to find out! I know I started out with a political science major, but quickly changed that to Speech & Hearing Science instead. And my graduate degree is in yet another field…

  • Education is an investment to ourselves and sometimes we just can’t avoid student loans. Hot career majors can help you earn a good starting salary to justify the high debt but if you are in a major where the starting salary is not good, then having the same high student loan debt is just a big killer on your finances

    • It’s definitely a balance — you have to think about both the best case and worst case scenarios before deciding to commit to a loan.

  • Shauna

    I have my parents finance my loans (i have to pay the 20k plus back to them in 4 years time but it beats better than paying interests to banks. So how about negotiating with your parents for repayment first?

    I am a psychology major and i am not paid much. But the knowledge that my psychology education has brought me is priceless. It

    One thing i have to admit though. Given the prevalence of college graduates nowsday, it’s better that you have to weigh the pros and cons of college education. Made sure you at least have some plans to be able to pay off your loans given the major you are in. Otherwise, you may better off being in the labour force to gain work experience. Remember, it’s the youth period, make good use of it.

    • I think a lot of parents don’t have the money to send their kids to college, even in the form of lending it to them. But I agree, there should absolutely be a plan in place to pay back the loans, ideally a plan that includes the worst-case scenario of things not working out the way you’d like.

  • That is wild that over 97% of people attending private universities are borrowing money! I would be interested to know how the salaries of people that attended private schools compare to ones that attended public schools.

    • Yeah, I thought it was interesting too that people who attend 4-year private *non-profit* schools are borrowing larger amounts than people who attend 4-year private *for-profit* schools.

  • Great graphic. Interestingly, it directly contradicts what used to be the prevailing wisdom, that graduates in the liberal arts started at lower salaries but over time outearned those with technical degrees. If these figures are right, that’s simply not true.

    What’s frustrating is to see graduates — like my son — with excellent degrees from pricey private liberal-arts colleges stuck in dead-end jobs that can be (and are) done by high-school graduates. And like the high-school grads he works with, I can assure you he isn’t earning anything like 60 grand.

    It’s too bad that we’ve turned college-level education into vocational training, which is quite a different endeavor. But I guess if a young person is smart, he or she will choose to forgo four years of education and use the time to get trained for a job.

    • The sad part is that college has become sort of a “minimum requirement” to get interviewed for many jobs — unless you know someone who works at the place you are applying, or they have trouble finding a qualified applicant. So not having a degree makes finding a job harder, but having a degree doesn’t seem to change the earnings potential much in many cases.

  • TL

    I just started going to a vocational school for medical assistant. It’s my second month and I’m deciding on whether to invest in taking out student loans to get a car because not having a car is a big issue for me. I’m just worried that I wont be able to get a job after I graduate in order to pay off the student loans. I’m in a rut right now I dont know what to do.

    • Could you get an inexpensive (say $2000) car? Or you could probably make extra money in some way to avoid having to borrow money. (Babysit, tutor, yardwork, PT job…) Maybe you could even get a job in your intended field right now, and that would help you get a job as a medical assistant after you graduate.

  • I know, you get student loans and then you don’t even wind up getting a job that is any better then the guy who dropped out and got a GED.

    • Sadly, that’s true. On the other hand, at least someone with a college degree has a greater number of possible jobs to apply for, since so many seem to require a college degree to apply.