Net Earnings Calculator

Compare Working More vs. Borrowing

Working long hours has been proven to have a negative effect on academic performance, yet today so many students are working long hours to pay for their education. Is this a wise financial strategy? The following two examples suggest it may be foolish to work long hours, especially if you have not yet explored the option of student loans.

IshaqMeet Ishaq. Ishaq is considering two scenarios for paying for his education.

Scenario 1: Work more, borrow less, and finish later: Ishaq could work as an intern for a local business working 25 hours per week at $8.00 an hour. The heavy work schedule means less time to study, and as a result it would take him five years to graduate. Each year of school, uncluding year five, Ishaq would need to borrow $5,000 to pay for tuition and books. In addition, Ishaq would lose the opportunity to work full-time at a higher wage in year five.

Scenario 2: Work less, borrow more, and finish sooner: Ishaq could take out a $7,000 loan per school year to help pay for his education. Having the loan would allow Ishaq to reduce his work time to 16 hours per week. This job also pays $8.00 an hour. By having more study time, he would be able to graduate in four years and find a job earning $28,500 per year.

You can determine your own net earnings using the calculator below. It is designed to show you whether it is in your best interest to borrow, or borrow more, and finish sooner or work and borrow less or not at all. The calculator assumes that you can borrow more and finish college sooner or work more, borrow less, and finish later. If this is not true in your case, it may not help you.

The calculator will estimate the cost to you of increased borrowing versus taking additional time to finish college. The first scenario assumes you would borrow the same amount you have been borrowing or no borrowing at all. The second scenario is based on only the additional amount you would have to borrow to graduate sooner. You should estimate how much you would need to borrow in order to keep the amount of time you spend at work to a level that would allow you to graduate earlier.

An important consideration in this calculation is how much you expect to make once you complete your degree. For most students, the less you make now compared to after graduation, the more likely it is to be to your advantage to borrow and finish sooner. If you would have to borrow a great deal more, you do not expect to earn significantly more once you graduate, or you already make a relatively high wage, borrowing is less likely to be an advantage. For purposes of comparison, the second scenario assumes you will pay off the full cost of extra borrowing in the first year after graduation to approximate the difference in total costs. In most cases, you will spend loan repayment costs over several years.

This calculator assumes a year of college to be 30 weeks (15 per semester). Numbers from Ishaq's example above are pre-entered for your reference only.

Scenario 1 - Work more, borrow less, and finish later (5 years).

Current hourly wage:  
Hours worked per week:  
Student loan amount per year:  

Scenario 2 - Work less, borrow more, and finish sooner (4 years).

Current hourly wage:  
Hours worked per week:  
Student loan amount per year:  
Post-graduation first-year annual income:  

Need help estimating first-year income?
Use AIE's Major Choices tool.


This calculator was developed using data and concepts set forth in: Jacqueline E. King (2002). Crucial Choices: How Students' Financial Decisions Affect Their Academic Success. Washington, DC: American Council on Education.

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