Let’s start by comparing higher education philosophies through the decades.
- Your parents’ and grandparents’ generations: “Obtaining a college degree is an important educational objective. If you’re able, you should go to college.”
- Your generation: “Obtaining a college education is the foundation for many careers. If you want job x, y, or z, you need to go to college.”
So, what’s changed? What happened over the course of two or three decades to shift the educational landscape?
The single most important variable – the thing that has changed the most from the time that your parents were college-age – is the cost of education. Consider this information from a 2015 CNBC report on student debt:
- As of 2015, these are the numbers: 40 million borrowers, owing an average of $29,000, totaling approximately $1.2 trillion in student loan debt across the U.S.
- On average, college graduates still earn more than workers without diplomas. But remember – if you’re saddled with massive student loan debt, that earning disparity can be quickly erased by a large monthly payment!
- The cost of tuition has outpaced inflation, and education costs are now, after mortgages, the single largest collective debt in the U.S. Public funding (mostly state) budget cuts are largely responsible, along with an increase in amenities offered by schools and a huge increase in non-teaching jobs at most colleges and universities.
Whew, that’s a lot of bad news! College is wildly expensive, college graduates are often saddled with debt, and that debt has become, over time, what is now referred to collectively as the “student debt crisis” in a country full of people who really, really want to go to college!
Despite all this, we believe in higher education. We believe that college is more than just an expense, that it’s a pathway to building a bigger, better world for you, for your family, for generations to come. We believe in education, but we also believe in responsible borrowing. So, what does that mean for you?
Know the value of your degree
Whether you’re an English Lit or a Pre-Med major, you must sit down and crunch some numbers. What career path do you anticipate pursuing, and (this is the tough question) how much will you earn?
The answer, of course, is that doctors earn more than English teachers. A LOT more. As a result, both the annual cost of financing your education (4-6 years vs. 8-12 years) and the total amount you should feel comfortable borrowing will be very different. That’s not to say that the future English teachers of the world shouldn’t borrow money! We need you! But if you know that your annual salary for the duration of your career is likely to average $46,000, and you’re borrowing $75,000 to finance your education, you’re much more likely than that pre-med student to end up one more statistic in the student loan crisis.
Borrow smart. Fully exhaust all scholarship opportunities and work while you’re in school. Choose loans with competitive interest rates, and upon graduation consolidate or refinance if those options will help you to save money. Know the value of your degree – not the theoretical value or the personal value, but the genuine, annual salary monetary value, and make that the primary factor that influences your borrowing.
We’re here to help when you’re ready to talk about which options might align best with your career path!