Jul 25, 2017 at 12:00am ET By Joanna Hughes

We often talk about the importance of “being smart” about student debt. Now comes the news that there may be a more quantifiable relationship between the two -- at least when it comes to SAT scores. Here’s a closer look at research from online higher education financing resource Nitro indicating the link between student debt and SAT scores.

New Insights into the College Investment

While student debt has skyrocketed over the past few decades, a growing body of evidence still points to the benefits outweighing the costs. But Nitro’s findings -- based on data from 4,600 public and private higher education institutions --  also highlight a discrepancy: Says the report, “The data show a correlation between higher SAT scores and lower average student debt.” Meanwhile, students with lower SAT scores are graduating with higher debt loads.

The Earning Potential Factor

The report further reveals a connection between schools with high earning potential and low student debt levels.

Concludes Business Insider of the phenomenon, “While the reasons for this dichotomy are varied, at some institutions it may relate to the generous financial aid packages the schools are able to provide. Universities like Harvard and Yale have multibillion dollar endowments and are able to provide a good deal of tuition for students in need. At these same schools, there also tend to be a large number of wealthy families who do not need to take out loans to pay the quarter of a million dollars it normally costs to graduate.”

The takeaway, according to Nitro? “When making an investment – especially one that impacts your financial future – you’ll want to attempt to minimize financial risk while maximizing potential reward.” In other words, the decisions you make along every step of the way -- from whether to take that SAT prep course to your choice of school -- have financial repercussions which don’t just impact you now, but also over the long run.

Learn how to pick the right student loan.

 

 

 

Joanna worked in higher education administration for many years at a leading research institution before becoming a full-time freelance writer. She lives in the beautiful White Mountains region of New Hampshire with her family.

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