Loans.org: Car and Student Loans Costs Are Similar, But One Is More Valuable

    RANCHO CUCAMONGA, CA, March 06, 2012 /24-7PressRelease/ -- Loans.org advises young adults contemplating borrowing money for cars or college to consider that the amount that gets borrowed for school is generally about the same amount that gets borrowed to buy a vehicle, despite the fact that a vehicle loses its value at alarming rates while an education does not.

According to the Federal Reserve, Americans who recently financed a vehicle did so at an average cost of $28,000--very close to the amount of money a student needs to finance a four-year degree at a private college, said Raynard S. Kington, president of Grinnell College in Iowa.

While car and student loans cost roughly the same, their lasting values are wildly different.

Vehicles typically lose 15 to 20 percent of their value with each passing year. That means after four years--with many vehicle financers still having one more year of monthly payments--their $28,000 automobile will be worth only about $14,600.

Education, however, usually results in an immediate increase in value. Young adults with a 4-year college degree earned an average of $45,000 in 2009--50 percent more than those with a high school diploma.

Source: http://nces.ed.gov/fastfacts/display.asp?id=77

The difference in value yielded by an education compared with that of a vehicle equates to thousands of dollars. But despite that fact, protestors are far more critical of education financing than auto financing. Online communities of student borrowers have even threatened to collectively default on their student loans.

And while student loan picketers continue to fume, Equifax says 1.7 million new auto loans are originated with every passing month.

To learn more about student borrowing issues, readers can go to http://loans.org/student where they will find a frequently updated library of financing information. Additionally, prospective applicants can access a free-to-use quote-comparison generator that is designed to help consumers receive the lowest interest rates possible.

To access the full article on student borrowing compared with the borrowing for vehicles, readers can follow the "Articles" link at the top of any page on the site.

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