Bernanke: Students Must Be Smart About College Loans

WASHINGTON (August 7, 2012)--Federal Reserve Chairman Ben Bernanke says students need to be careful when investing in their education.

Bernanke said Tuesday that taking on debt to pay for college can be an important way of increasing one's earning potential, but said 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, saying they should know what kind of jobs and salaries they can expect to earn with their degrees.

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