15 ways to ruin your financial future: Go to a college you can't afford

Education, we're told when we're young, is the ticket to freedom. Work hard, go to school, and you can do anything your ability allows, regardless of who your parents are.

Unfortunately, rapidly rising college costs and ever-increasing student debt loads threaten that American dream.

A 2008 Yale study explored the correlation between student debt loads and the occupational choices of recent graduates. The title of the article in the Yale Economic Review describing the findings tells the story: "Constrained After College." Who wants that? The study found that for every $10,000 in student loans a student graduates with, they accept jobs that pay $2,000 more in annual salary: take on a lot of student debt and get rich? Not quite.

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Students who graduate with large debt loads feel pressured to earn as much money as possible to service their debt. Those who were savvy (or fortunate) enough not to take on a lot of debt were less constrained in their job selections. Other results from the same study back up this idea: every $10,000 in student loan debt results in a 5% reduction in the chances that a student will become a teacher or work at a non-profit or similarly low-paying, high-karma job. If your goal is to graduate and make the world better at the possible expense of earning a lower starting salary, you should know that student loan debt will limit your ability to do that.

And what of the argument that attending an elite college is necessary for maximizing job prospects? Think again. A Princeton study found students who were accepted to Yale but attended Rutgers earned, on average, just as much as Yale graduates. The title of the Professor Alan Krueger's column discussing his findings tells the story: "Children Smart Enough to Get into Elite Schools May Not Need to Bother."

Here's the reality: attending a private school at the expense of taking on a large debt load -- or worse, depleting the parents' nest egg -- will result in increased stress and constrained career choices, without increasing opportunities beyond what a student of the same ability could have done with a less expensive public college education.
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