Menu
Home

Education

Bernanke: Students must be wise with college loans

Federal Reserve Chairman Ben Bernanke says students need to be careful when investing in their education.

Bernanke says taking on debt to pay for college can be an important way of increasing one's earning potential. But higher education can also become a financial burden if it doesn't lead to a good job, he warns.

"You've got to make smart investments," Bernanke said during a town hall meeting at the Fed with teachers from around the country.

Student loan debt has steadily increased since the Great Recession and totaled more than $900 billion in March, according the Federal Reserve Bank of New York.

Bernanke urged students to do their homework before taking out loans. They should know what kind of jobs and salaries they can expect to acquire with their degrees. They should also research schools' graduation rates.

A college degree can make a big difference for jobseekers, especially in a tough economy.

The unemployment rate for college graduates was 4.1 percent in July. That's well below the national rate of 8.3 percent and the rate of 8.7 percent for those with only a high school diploma.

Bank Rates

Loan Type Graph Rate +/- Last Week
30 Y Fixed Graph 4.08% dw 4.24%  
15 Y Fixed Graph 3.19% dw 3.23%  
30 Y Fixed Jumbo Graph 4.51% dw 4.53%  
5/1 ARM Graph 3.36% dw 3.46%  
5/1 Jumbo ARM Graph 3.71% up 3.57%  
Loan Type Graph Rate +/- Last Week
$30K HELOC Graph 4.36% -- 4.36%  
$50K HELOC Graph 4.06% -- 4.06%  
$30K Loan Graph 5.07% dw 5.08%  
$50K Loan Graph 4.50% dw 4.51%  
$75K Loan Graph 4.50% dw 4.51%  
Loan Type Graph Rate +/- Last Week
36 M New Graph 2.93% up 2.92%  
36 M Used Graph 3.47% up 3.46%  
48 M New Graph 3.21% -- 3.21%  
48 M Used Graph 2.98% -- 2.98%  
60 M New Graph 3.23% -- 3.23%  
Loan Type Graph Yield +/- Last Week
6 month Graph 0.34% -- 0.34%  
1 yr Graph 0.66% -- 0.66%  
5 yr Graph 1.34% -- 1.34%