It Makes Sense To Belong! Learn Why >

the pros and cons of student loansIf you or a family member are considering the options of paying for college, it is important to determine what is best for your situation first. There are many pros and cons of student loans, and at 1st Ed Credit Union, we believe in transparency with our customers. We understand that while loans provide a great opportunity for many students to fund their college of choice, they might not be the best fit for everyone.

The Pros and Cons of Student Loans

Pro: Student Loans Can Fund Your Dream School

College tuition continues to rise, which may create challenges with funding your preferred choice of college. Even after setting aside money through a college savings plan, parents are finding that it is still not enough. Taking out a student loan can help you fund your dream school so you don’t have to worry about the high costs of tuition and living expenses. 

Average Tuition and FeesSource: US News

Con: Student Loans Create Post-College Debt

It is essential to note that you will experience post-college debt when taking out a student loan. Depending on your level of risk tolerance, this might be a bigger deal to some than others. Attending your dream college and earning a degree should, in turn, increase your chances of earning a high-paying job. Many see paying for student loans as a necessary expense of adulthood. Others, who are more frugal, see debt as a risk to their financial wellness right out of college. 

Pro: Student Loans Help You Enjoy a Better College Experience

Student loans allow you to focus on education without having to worry about working long hours to pay for it. Many students will still get a part-time job to pay for extra expenses. But, they will have the opportunity to join clubs and other extracurricular activities, because they have the flexibility to do so. College can provide one of the best experiences of your life with all the learning opportunities and connections made. 

Con: Student Loan Debt Can Get in the Way of Lifestyle Goals 

Depending on your debt-to-income ratio and budget, student loans can limit your ability to make large purchases like a home, car, wedding, etc. However, don’t let this deter you completely. There are many factors that contribute to this like how you manage your budget, relationship status, and lifestyle. 

Pro: Student Loans Can Help You Build Credit

If you stay on top of paying back your loan in a timely manner, this is a great way to build credit. Building your credit score is an important factor in many purchases, including a house mortgage, insurance, car loans, and more. Having strong credit shows banks that you are trustworthy, and many financial institutions reward you for this. However, having bad credit will also do the opposite by penalizing you. 

Con: Student Loans Can Penalize You for Late Payments

Missing payments on student loans will result in penalties. Some of these penalties include added interest, higher fees, or even wage garnishment. As mentioned above, this also affects your credit score, having a rippling effect on big purchases you plan to make. Staying on top of your loan payments is crucial for your financial success. 


Having reviewed the pros and cons of student loans, we want to help you make the best decision for your student loan. At 1st Ed Credit Union, we have advisors ready to answer your questions. If you are still on the fence for whether student loans are right for you, let’s have a conversation. We want to see you thrive with your education. Being a part of that process with you is our honor. 

1st Ed Credit Union’s Tip to You:

During college, remember your “why” for taking out a student loan. It is easy to get caught up in the luxuries of living independently and making your own choices. If you keep that “why” always in the back of your mind, it will motivate you to work hard and stay focused throughout your education. 

You are now leaving 1st Ed Credit Union

1st Ed Credit Union provides links to web sites of other organizations in order to provide visitors with certain information. A link does not constitute an endorsement of content, viewpoint, policies, products or services of that web site. Once you link to another web site not maintained by 1st Ed Credit Union, you are subject to the terms and conditions of that web site, including but not limited to its privacy policy.

You will be redirected to

Click the link above to continue or CANCEL