Student loans could be a crushing, heartbreaking burden on college grads that could stretch well into adulthood.
This is also a hot-button political issue. Should there be some amount of Government paid forgiveness? How much, 10 K? 50 K? Is this fair to those who paid their college debts in full? Is it fair to those who didn't attend college but have productive jobs in essential industries? Does this encourage even more borrowing for higher education? Does this incentivize higher educational institutions to raise their price for room, board, and tuition? Or will college become more and more remote, lowering the price tag of a degree?
By the time this debate is settled, today's high schoolers will most likely be in college already; taking on student loans to pay for the privilege. And when I write the word privilege, I really mean it. I went to a four year college and it is one of the things I am most grateful for in my life. But that was a different era. The cost was cheap even by the standards of college costs in the 1980's. I went to State University of Albany, NY. My wife and I met there in 1987. My college buddies are still among my closest friends today. I wouldn't trade my college experience for anything in the world.
But it is different today. There was no internet back then. The need for physical college is becoming a luxury today, if it isn't already. The degree is the only thing that counts. And the cost of a degree at a traditional four year college has skyrocketed. Sure, there are loans, grants, and scholarships. But that's not enough; certainly not enough to compensate for the inflation of higher education costs.
Something I do to help my clients who are getting ready to send, or consider sending, their child to college, is to show them a list from the U.S. Bureau of Labor Statistics, National Occupational Employment and Wage Estimates. It's a composition of average national annual wages from every sector of the economy.
The figures are from 2019 because the 2020 numbers aren't out yet. But that's not relevant. What is relevant is that it will give you and your child an idea of which careers have the potential to make the high price tag of college worth the cost from a Dollars and Cents point of view.
College bound kids need to choose a profession that pays well, not one based on passion (that's what a minor is for, right?). Explaining this to a 17 year old who gets a massive dopamine rush every time he or she envisions their first choice for college, regardless of cost, isn't always easy. But hopefully, when they see the earnings potential of a chosen career compared to the cost of their higher education, they'll calm down and realize that the cost of college does not necessarily equate to future income. As an example:
Bookkeeping, accounting and auditing clerk makes $42,960.00
Human Resources Manager earns $129,570.00
These are national averages and speak nothing to one's capability and competitiveness. Obviously, the college student earning a degree in HR will be the one who is more likely to be able to justify the cost of a traditional four year education. These annual wage figures are what you'll see on the U.S. Bureau of Labor Statistics website.
Check out the website
HERE
Knowing this kind of information before one commits to taking out student loans would be a big help.
From last week, my email blast was about the GameStop saga and the issue with rapidly rising interest rates, which continued into this week. Check that out
HERE.
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