Out #4: Return to School in Order to Have Previous Loans Deferred

Ah, yes. Returning to college in order to have current student loan payment deferred is an old stand-by. One leading to even more debt while hoping that the further education will be you ticket to a high paying job in order to pay it.

I have employed this method to dodge paying my loans for awhile. I couldn't find a job after undergrad (please refer to My Story), and I didn't know what to do. I admit that this is the easy way out ... well, for a brief period of time anyway. And in a few years my student loans were back with a vengeance - bigger, badder and even more difficult to pay off!

I went back to graduate school even though I preferred to get another BS degree in a different Engineering discipline such as Electrical Engineering. It probably would have only taken a year or so to complete, but the rules about borrowing additional funds under the student loan program required that I attend graduate school if I already had a bachelors degree. BTW graduate school is more expensive than undergrad and more is expected from you. I still borrowed the maximum I was allowed at the time (around $8k per year, I believe) even though I had a Teaching Assistantship through the university!

Since I didn't have all the required undergraduate classes for an Electrical Engineering Masters degree, I had to take undergraduate classes my first year but still pay the graduate rate. What a racket!

I ended up in the same boat I was in before graduate school, but this time a LOT more in debt.

If you return to school, do your best not to borrow additional funds! In the future I will suggest ways of doing this. Of course, the methods I will discuss are not suitable for everyone. If you go back to school and must borrow money, do your best to minimize the amount.

Pros
- Your student loans will be deferred while you are attending college full-time
- The degree you receive MAY help you to obtain a higher paying job
- You will hopefully be more educated which is something that nobody can take away from you (although you may end up wishing that it could be repossessed to pay off accumulated student loan debt)
- Interest on subsidized student loans will be paid while you are in school

Cons
- You may not be able to borrow to enroll in a bachelors degree program if you already have a bachelors
- The degree you receive MAY NOT help you to obtain a higher paying job or the pay may not be as lucrative as you thought
- The job market may change while you are in school and jobs in your chosen field of study may temporarily or permanently dry up
- If you borrow money, it will be additional debt to what you started with (and hence a higher monthly payment when you leave school)
- For whatever reason you may need to drop out of school, and would have spent time and money towards a degree that you don't have and can't use to obtain a job
- Unsubsidized student loans will continue to accrue interest and will be tacked onto the principal of your loan if you do not pay the interest while in school