Financial Knowledge Assessment:Q5A
5. What is the most important financial consideration when deciding whether or not to take out a student loan?
- A. The quality of the school you plan to attend.
- B. The total cost associated with attending the school.
- C. The return on investment you'll receive by obtaining a degree.
- D. Your current GPA and college testing scores.
Explanation: The correct answer is “C.” The return on investment you’ll receive by obtaining a degree.” The primary consideration of whether to take out a loan is your future earning potential. While the quality of the school and total cost of attending are important factors, the bottom line should be whether or not this degree will increase my earning potential enough to warrant taking out a loan. Moreover, every service member should consider whether it is necessary to pay for your own education. There are entitlements, such as the GI Bill that service members are entitled to following service, as well as opportunities to obtain college credits while in service. Finally, the decision to take out public versus private loans could also impact your financial future, as private loans may not be covered by public loan repayment or forgiveness programs. The takeaway here is that you need to do your research, and make an honest assessment of whether more education is in your best interest. Visit the Future Resource Page of the MCLD website for more information.
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