Why staying in school isn’t always smart

Sometimes it's better to leave school than continue to take on debt to fund it.

Question: I need six credits to finish my university degree and even though I am swimming in debt, it is a question of pride and I have already invested so much. Can I afford to continue?

Jason Heath: I’m a firm believer that there are only two good things to borrow for: a home and an education. You can borrow too much for a home that is too expensive, and likewise, you can borrow too much for an education with a value that is more emotional than practical.

In this case, this woman has a university degree already and is close to completing another. She works for the government and it’s unlikely the completion of a second degree will mean more opportunity for her in her current role or career path. Arguably, it won’t open up future job opportunities elsewhere, either. So it’s really just a matter of pride.

She says she’s “tired” and does “not want to do it anymore.” One of the main reasons she’s continuing her studies is because if she stops, her student line of credit converts from interest-only payments to a fixed monthly repayment schedule, including principal.