Are Student Loans Worth it? What the Data Says - Earnest | Earnest

Are Student Loans Worth it? What the Data Says

By Kassondra Cloos | Published on February 23, 2026

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If you’re debating whether a college education is worth the price tag, there’s a lot of data to take into account. For starters, research shows that having a bachelor’s degree can significantly increase your earning potential over having an associate’s degree or a high school diploma. And a master’s degree can lead to even more high-paying jobs.

Taking out student debt to pay for the cost of college can make the equation a bit more complicated. So, are student loans worth it? Here are three cases when taking on student debt may be worth it.

Key takeaways

If you earn a bachelor’s degree

Research shows that you can earn significantly more money throughout your lifetime if you have a bachelor’s degree vs. a high school diploma, potentially well over $1 million more.

According to a 2021 study by Georgetown University’s Center on Education and the Workforce, the median worker with a bachelor’s degree earns about $2.8 million in their lifetime. That’s about $1.2 million more than someone with only a high school diploma and about $800,000 more than someone with an associate’s degree.

Let’s put that into perspective. The average four-year college degree at in-state rates at a public university costs a little over $100,000 in total, including room and board, according to EducationData.org. Out-of-state students and students who seek college degrees from private institutions can expect to pay about $176,000 to $218,000 over the same period, respectively. So, if you make a salary in line with the median and you spend about $100,000 on higher education, you’d still net over $1 million more over the course of your lifetime.

These numbers don’t take the cost of interest rates into account, so it’s important for college students to borrow money extremely cautiously. It’s always better to seek scholarships and grants and to pay for as much of your education in cash as possible through federal work-study programs or other jobs.

Keep in mind that to make student debt worth it, you’ll have to finish whatever degree you set out to earn. If you start college and drop out, you’ll still be responsible for paying off all your loans.

If you major in a marketable field

Depending on your career path, your potential earnings after graduation could vary significantly. If you need to take out loans to pay for college, it’s worth researching how much money you could earn as a college graduate in your chosen field to make sure your salary and required loans match up to your long-term financial goals.

Salaries also vary wildly based on position, field of study, job location, and the size of the company. Using Glassdoor, you can peruse anonymous salary data from thousands of positions at companies across the country. But for a general idea of salary range, here are a few average entry-level projections based on a study from the National Association of Colleges and Employers, published in 2022:

It’s worth noting that these are just starting salaries, and they’re averages. Depending on the company you work for, you may also be eligible for bonuses, stock incentives, or regular raises. So, you may want to project the long-term income potential for each field of interest, too.

The Bureau of Labor Statistics publishes an Occupational Outlook Handbook that allows you to browse data on salaries and education for dozens of fields of study. You can also browse by highest-paying occupations. Spoiler alert: nearly all the occupations on the list with a median annual salary over $200,000 are in medical fields.

Of course, you won’t know how much you’ll earn until you graduate and get your first job, but it can still be a useful exercise to do some math based on an ideal scenario. So, crunch the numbers: how much money per month can you make working your ideal job in your dream city? And how much money will be left after you make your monthly student loan payments? Start practicing budgeting now.

Some less lucrative careers come with the option to seek loan forgiveness for all or part of your federal loan balance after you’ve made a certain number of qualifying payments. Teachers who work in some underserved school districts, for example, may qualify for the Public Service Loan Forgiveness program.

High school graduates can also consider whether joining ROTC or similar military programs can help cover some college costs while providing skills that could improve career prospects after college.

If your student loan debt is manageable

The average student graduates with about $37,000 in federal student loan debt, according to EducationData.org, which doesn’t take into account other kinds of financing students may use, such as private student loans¹ and home equity-based financing their parents may borrow.

So, is that debt worth it? It depends. Even if you can make more money over time, you still need to be able to manage your financial situation until your debt is paid off.

You can make your debt manageable by utilizing flexible repayment plans for federal loans from the Department of Education. These plans analyze your income and offer you monthly payments you can actually afford until you start making more money. If you’re on a very tight income, you may not need to make any payments at all for potentially years at a time. However, beware that interest may still accrue, so you may have to pay more on that debt over time.

To keep your debt manageable, you should also be cautious about how much you borrow. You may be able to get lower interest rates with private loans, but federal loans have more flexible student loan repayment options. If you’re seeking a career that requires a master’s degree, you may find it wise to spend a year or two working full-time in an adjacent career before going directly to grad school. This way, you’ll have some time to make a dent in your total loan balance and save up for the cost of tuition, before becoming a student again.

You can estimate your potential loan payments using our student loan payment calculator.

How to make college more affordable

Before you ask if student loans are worth it, you should be asking if you’ve considered every possible way to stay out of debt. Just because the average student graduates with nearly $40,000 worth of student loans to repay, it doesn’t mean you have to choose between college or debt. There are ways to minimize the cost of college, and the amount you need to take out in loans, such as:

Learn more about Earnest student loans

Are you trying to fill the gap between financial aid and college expenses? Earnest offers flexible terms, no fees, and a 9-month grace period² compared to the 6-month grace period offered by other lenders. You can check out the latest rates by visiting our private student loans page. Find out what your student loan payments could look like with our free student loan calculator.

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About the Author

Kassondra Cloos

Kassondra Cloos is a writer, editor, and former Earnest client. She refinanced her own student loans with Earnest after graduating and has first-hand experience with the refinancing process. She has been writing about personal finance and student loans since 2017. She also writes about sustainable travel and adventure for The Guardian, Outside, Backpacker, and many other publications. You can find more of her work via her travel newsletter, Out of Office.