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Should Seniors Take Out Student Loans to Learn New Skills?

How to ensure the benefits are worth more than the debt

spinner image older student entering a college financial aid services office
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That's it! It's time for a change. You've plateaued in midcareer, your work life seems unbearable or you're just plain bored. Should you go back to college for additional training — and take out student loans — in the hope of improving your circumstances? Financial advisers and workplace experts agree that adding debt for a career boost can be risky, and one that you'd be wise to ponder carefully.

Debt versus long-term financial health

With sound financial planning, people can pay off student debt while meeting other financial goals. “Student debt is very prevalent but not burdensome in most cases,” says Scott Hammel, a certified financial planner at Apeiron Planning Partners in Dallas.

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For some, however, student debt can cause more problems than it solves. Belle Osvath, a certified financial planner with VLP Financial Advisors in Vienna, Virginia, sees student debt as a much bigger issue with some of her clients — so much so that she sought additional training to become a certified student loan professional (CSLP) in order to provide counsel about the federal payment options. “It's shocking how complex the plans are,” she says.

What's more, Osvath says the amount that some people take on can be startling — and may affect their ability to build wealth and plan for a secure retirement. It's a bigger problem now with the pandemic, especially if someone was underemployed before it hit a year ago. “I had a client who had over $400,000 in debt from undergraduate school, an MBA and law school,” she says. A typical rule of thumb is that your total debt payments — student loans, mortgage or rent, and credit cards — shouldn't be more than 36 percent of your gross income. Another rule of thumb: If your total student debt is less than your total income, you should be able to repay it within 10 years.

Roger Young, a senior financial planner at T. Rowe Price in Baltimore, recommends that, whenever possible, people limit their borrowing to federal student loans, which allow them to borrow what will be, in most cases, a manageable amount. “The federal program also allows for income-based repayment, deferment and forbearance options if things don't go as planned.”

Which professions are worth the loan?

You're in. After weighing all of the other training options available, it's become clear that pursuing another degree is your best move. Now it's important to choose a satisfying career that's worth it — one that will provide the salary required to pay down any debt you will acquire while still meeting your other financial goals. The following resources will help to jump-start your research.

The Bureau of Labor Statistics lists these as the 10 fastest-growing occupations, along with their median annual pay. Wind turbine service technicians ($52,910), nurse practitioners ($109,820), solar photovoltaic installers ($44,890), occupational therapy assistants ($61,510), statisticians ($91,160), home health and personal care aides ($25,280), physical therapist assistants ($58,790 per year), medical and health services managers ($100,980), physician assistants ($112,260) and information security analysts ($99,730).

You'll also want to check “The Best Jobs in America in 2021” list at U.S. News & World Report, which ranks 25 positions by using data from the Bureau of Labor Statistics. You'll see the industry they're in, median salary. unemployment rate, projected job growth in this decade, and a description of each role. For a deeper dive, consult any of the other 16 useful lists on this site, which includes a ranking of the jobs that pay the best.

Finally you'll want to read “6 Careers Worth Going Back to School For.”

Is this loan necessary?

Before you consider what a loan costs, ask yourself: Do you need an additional degree — and the loan — in the first place? “Don't just get a degree because you think it will get you a better job,” Osvath advises. “Do the research and then see if you can find an employer that will help with the cost or reimburse you.

Before signing up for a slew of new courses, workplace expert Henna Inam urges caution, even if those courses are in sought-after technologies. “While additional degrees may be helpful for midcareer leaders, my advice is to be very clear whether a degree is actually needed or whether certain skills — acquired through certifications or upskilling and work experience — will be sufficient,” says Inam, author of the book Wired for Disruption.

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As she interviewed experts for her book, Inam says it became very clear that while many jobs are being automated out of existence, many new ones are being created. “While technical skills will be important, they are also more likely to be disrupted and become obsolete, requiring ongoing learning,” she warns. “Soft skills such as emotional intelligence, communication, creativity and agility are more likely to have a longer half-life.”

Think of it. After many years on the job, it's likely that you've already acquired many of these skills. To make them obvious to recruiters, take a close look at your résumé and your LinkedIn profile and rewrite them, if needed, to highlight this experience. Or consider engaging the services of a professional resume writer to do the same. It will cost you little — some extra time, additional thought and perhaps a small fee.

Shop wisely

Don't be impulsive and rush to make a change, even if you're very unhappy in your career. Instead, consider how you might reposition and emphasize the skills you have or whether your employer can help you to update them. And by all means, do the math before signing on for a loan. “We recommend that any student — young or old — understand potential costs and financial aid before applying,” Young warns. “One helpful tool is a college's net price calculator. By entering some basic financial information, you can get a sense of the aid you may receive and how much your costs could be."

Tips for Older Americans Who Are Still Tackling Student Debt

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