The Price of Higher Education: Student Loan Debt

These days, it seems inevitable that any discussion of the economy will include a discussion of student loan debt. And with good reason – according to U.S. News and World Report, the average college student will graduate with over $25,000 of student loan debt. This is the highest level of debt in the nation’s history, and cumulative student debt has surpassed credit card debt for the first time ever. The high cost of getting a bachelor’s degree has caused many to speculate as to whether or not going to college is still a worthwhile investment.

According to Yahoo Education, a U.S. Census Bureau report stated that more than 30 percent of adults ages 25 and older had at least a bachelor’s degree, the highest level of degree-holders ever. And a Department of Labor earnings report for 2011 showed that workers with a bachelor’s degree earned a median income of $1,158 per week, while those with only a high school diploma earned $641 a week. Yet the unemployment rate for recent college graduates with a four-year degree is 8.9 percent, higher than the national average. This may be because many employers are seeking to cut costs by downsizing or outsourcing many entry-level jobs overseas. Therefore, it is not at all uncommon to find young people with bachelor’s degrees working at Starbucks or waiting tables.

Alternatives to College

The difficulty students face in finding good-paying jobs after graduation has led many to drop out or even reconsider going to college at all. After all, some of the most successful businessmen in America are actually college dropouts – Facebook founder Mark Zuckerberg, Microsoft founder Bill Gates, and late Apple CEO Steve Jobs are all examples of people who prospered without a bachelor’s degree. A four-year college education may not be a good choice for young people who want to start their own businesses, or want to pursue more creative or artistic endeavors. Having a bachelor’s degree often does not provide much of an edge in these professions.

Skilled labor may also be a good career path, and a way to avoid the crushing cost of college. According to the College Board Advocacy & Policy Center, the average in-state tuition for a public 4-year college was $8,244 in 2011, while a public 2-year college cost an average of $2,963. Industries like welding, carpentry, and plumbing are beginning to see a rebound from the recession, and are hiring more workers. Skilled laborers typically earn good wages, particularly if they are part of a trade union.

And there is a shortage of skilled labor in these industries, according to Yahoo Education, which may make a two-year associates degree or apprenticeship a better deal than a bachelor’s degree. These jobs typically are not outsourced, and the high demand for skilled labor coupled with less competition from other job seekers may make it easier for grads with a certificate or associate’s degree to find work, compared to their counterparts with a bachelor’s degree. The low tuition costs associated with vocational or trade programs, combined with the relatively high starting salaries in these professions, can also help students avoid the crushing mound of loan debt, or at the very least be able to pay off that debt sooner.
So while a bachelor’s degree may be a good investment for some, young people should weigh all their options carefully before deciding whether or or not it will be worth the cost.

About the Author: This article was written by Karl Stockton for the team at payday loans Houston.