Are Student Loans Worth It? How to Run the Numbers

Are student loans worth it? For a degree you actually finish, at a price close to what federal loans cover, usually yes. The typical bachelor’s degree holder earns hundreds of dollars a week more than the typical high school graduate, and that gap is a lot bigger than the payment on a normal federal loan balance.

The bad bets are the ones people don’t plan for. Borrowing and not finishing. Borrowing far more than the job you’re aiming at pays. Or filling the gap with high-rate private loans when federal ones were still available.

Here’s how to run the numbers for your own situation, using official figures only.

What a degree pays, on average

The Bureau of Labor Statistics tracks median earnings and unemployment by education every year. These are medians for full-time wage and salary workers age 25 and older, so they’re a starting point, not a promise.

Source: BLS, Education Pays, 2025 annual averages (11-month averages, since October 2025 data wasn’t collected). The median for all workers was $1,268 a week.

What should you take from it? Two things. A bachelor’s degree holder’s median is $612 a week above a high school graduate’s, which works out to about $31,824 a year. And the “some college, no degree” row barely moves. If you borrow and don’t finish, that’s the row you land in, with the loans still attached.

One honest caveat: these compare different people. Someone who finishes a degree may have earned more anyway. So use the table to size your bet. It can’t guarantee your payoff.

Run your own numbers in four steps

1. Look up your program on College Scorecard. Search Fields of Study for your school and major. It shows what graduates of that program earn and how much they borrowed, which beats any national average.
2. Estimate what you’ll borrow. Dependent undergraduates can borrow up to $5,500 the first year, $6,500 the second and $7,500 each year after, with a $31,000 total limit. Independent students can borrow more.
3. Turn the total into a monthly payment. New federal loans default to the Tiered Standard plan, which sets the term by balance: 10 years under $25,000, 15 years from $25,000, 20 years from $50,000 and 25 years from $100,000. Our payoff calculator does the math.
4. Hold it up against a realistic starting salary for that field, not the median for everyone with a degree.

So how does that compare? If you finish, $235.50 a month is $2,826 a year. Set that next to the roughly $31,824 a year between the two medians and the degree looks like a good bet, if you finish.

Now flip it. Borrow $12,000 over two years and leave without a degree, and you’d owe $136.38 a month for 10 years. The median for “some college, no degree” is only about $4,992 a year above a high school diploma. That’s the version of student debt that hurts.

When student loans are worth it, and when they aren’t

They tend to be worth it when:

• you’re likely to finish, and your school’s graduates in your major earn enough to cover the payment comfortably
• you’re borrowing federal loans first, with fixed rates, income-driven plans and forgiveness options behind them
• you’ve turned the total into a monthly payment and it fits a realistic starting budget for your field

Think hard before you borrow when:

• the program’s graduates don’t earn much more than people without it, which College Scorecard will show you
• you’re filling the gap with private loans at high rates, or asking a parent to take on Parent PLUS loans
• you’re borrowing for extras like a nicer apartment rather than tuition and basic costs

Graduate school needs its own math. Grad PLUS loans are closed to new borrowers. Graduate students can borrow up to $20,500 a year in Direct Unsubsidized Loans ($100,000 total), professional students up to $50,000 a year ($200,000 total), at 8.07% for loans first disbursed July 1, 2026 to June 30, 2027. A $41,000 master’s degree with no undergraduate loans in the mix lands in the 15-year tier, and at 8.07% that’s $393.48 a month. The median master’s holder earns $298 a week more than the median bachelor’s holder, about $15,496 a year. Worth it in many fields, but check your specific program.

Borrow federal before private

If you’re going to borrow, federal loans come first. They have fixed rates set by law, no prepayment penalty, income-driven repayment, and forgiveness programs like Public Service Loan Forgiveness. Private loans don’t have to offer any of that.

Parents have caps now too. For enrollment periods starting July 1, 2026, Parent PLUS loans are limited to $20,000 a year per student and $65,000 in total, at 9.07% for loans first disbursed July 1, 2026 to June 30, 2027. Families already borrowing for a program before then can keep the old limits for a while. If you still need a private loan after that, compare lenders carefully. Our guide to private student loans covers what to look for, and these other ways to pay for college can shrink what you borrow in the first place.

Already borrowed? Make it worth it now

If the degree is done and the loans are here, the question changes to how to pay as little as possible. The RAP calculator shows your income-based payment, our forgiveness programs list covers the ways out, and these strategies to pay off student loans fast help once the payment’s under control.