Student Loans vs Pay-As-You-Go College Funding
**Student loans** fund tuition now and repay from future income. **Pay-as-you-go** delays graduation but avoids interest—tradeoff depends on wage lift from the degree and loan rates.
Step by step
1. Project starting salary delta
Degree ROI = earnings bump vs cost + interest.
2. Monthly payment stress
Debt-to-income after graduation should leave room for housing and savings.
3. Opportunity cost of delay
Part-time study may forgo years of higher wages—model both paths.
Borrow vs pay-go
Low-rate federal loans + high-ROI majors often favor borrow; uncertain ROI favors minimize debt.
- Student loans: Finish faster; interest accrues; repayment risk.
- Pay-as-you-go: Less debt; longer time to degree; career delay.
Use our calculators
Common mistakes
- Borrowing full cost without major ROI research
FAQ
Are private loans worse?
Usually fewer protections and higher rates—exhaust federal options first where eligible.