I came across a blog through an MSN article that caught my eye; No More Harvard Debt. Joe Mihalic, the blog owner, shared his journey of paying off $90,000 in college debt in under 10 months. Obviously, that’s incredibly impressive and makes for a great headline. But I don’t want to get into all the details of how he did it, you can read that on your own by checking out his story. Instead, I want to focus on student/college debt in general.
With stories splattered all over the news of students graduating with mounds of debt and no job prospects, or at least not one that can easily pay off their loan balances, I want to focus on the beginning: How much college debt is too much compared to the career choice? and Do you really need to go to college in the first place? Not to put the cart before the horse.
Let’s start with the horse though, shall we? Who needs to go to college? Should everyone? My opinion is no, not everyone should go to college. There’s been this huge push toward every child attending college, but the truth is this may not be the best choice for everyone.
What ever happened to finding a trade? Being able to learn a skill and turn that skill into a business is important, too. We still need plumbers, auto mechanics, and small businesses that offer services for everyone. Of course these skills take training, but not necessarily in a 4-year college environment, and definitely not at an Ivy League school. Skilled tradesmen can make decent money as well. Not all college graduates make six-figure salaries and not all skilled laborers make minimum wage. Fallacies in income levels have mislead the public into believing college is the only way to live the “American Dream”, even if that means getting way over your head in debt.
Now, for the cart; What’s a reasonable amount of college debt compared to the career choice or college major? We’d all like to hope that through scholarships, grants, and the help of parents, college students would graduate free and clear of any debt. But that isn’t happening. So instead, parents and students have to navigate through student loan documents and calculate how much is too much or just enough?
A good place to start is figuring out what the student’s potential income may be based on their major or career of choice. This can be tricky if the student isn’t sure or their major is very general, like say, anthropology ;). However, discussing career outcomes may help the student figure out where they’re headed. Finding career salaries on sites like www.CBSalary.com can help decide on costs as well. Should you really attend a $40,000 a year school is you want to be an elementary teacher? Um, no. However, that may be just fine for a law student who might expect to earn $95,000 their first year out of law school. There are also ways to minimize college costs like attending a 2-year college first or a local state college, taking advantage of grants and scholarships, and looking into creative ways to work and go to school.
Of course, if you’re a student who’s already racked up debt and looking for ways to pay if off, lower expenses, increase income, and make a huge chart or visual to help you stay focused. In Mihalic’s case, he blogged about his journey and successfully completed it.
What do you think? Should all students be college-bound? Are there limits to how much students should take out?
8 Comments
Well, usually trades people go to college, it’s just not a four year degree or more. Maybe that’s just here in Canada though. My boyfriend is a carpenter and he went to college. I wouldn’t trust a tradesperson who didn’t at least have some little bit of education in the field. My stepbrother went to school to become a mechanic, too.
I don’t think college is for everyone, simply because if everybody went to college the wages and skills sets needed for jobs would get all messed up because it would be way to easy to find somebody to do the work you needed to do – there would be more skilled people than there would be jobs. I think college is a great experience though, and that everyone should at least consider it.
Also, starting a business, there are whole “entrepreneurial” programs – once again that may just be here in Canada – that lots will go through before starting a business to be successful.
@Daisy – You’re right learning a trade in a school, but it’s usually not a 4-year college. The college experience is also important, but I don’t think it’s worth racking up $100K in debt. There are so many possibilities out there, but I think students just aren’t aware of them so they go to college because “everyone’s doing it” or “they’re suppose to.” Thanks for sharing the Canadian point of view!
From my recent posts on how nicely tradespeople live, I definitely agree with you. I had a lot of financial aid in college but I also took on loans. What I had in loans vs my starting salary I thought was pretty reasonable. My loan balance coming out of school was about 1/2 of my starting salary. That felt doable to me and I paid them off in a few years.
I also think students should look closely at supply/demand as well. I didn’t want to major in something that had 200 graduates to every 1 job available. I didn’t like those odds at all.
@First Gen American – It’s great that you did your homework. And you brought up a good point, choosing a major that isn’t too saturated, but still in high demand.
I agree – I dont think everyone should go to college, and nor should they have to. If someone wants to be an electrician, welder or something and they can be happy and earn as much as they need to live off of the income they can generate through that trade, why should we try and make them do anything else?
I don’t think all students should be college bound, but most are really too immature to make that kind of life decision at 18. In an ideal world, most high school grads should take a year or two to join the work force before deciding to go to college. It gives them time to figure out what they’re good at and what they’d like to do before piling on 5 figure debt for something they may end up hating.
Also, the sad truth is that some degrees are simply not worth the money. Science, engineering and math heavy degrees clearly are, but arts and history are probably not, unless you want to be a professor (assuming there are openings)
Too many are graduating with too much debt with no skills and a degree that is not in demand. That’s a recipe for disaster.
@Joe – I’d have to agree that some degrees just aren’t worth the money. It’s better to select a less expensive option, like a 2-year junior college then a 4-year to reduce overall education costs. It’s funny that we think 18 is immature now a days. Not that long ago, many people were married with a kid on the way at 18. I wonder if we’re extending childhood by too much these days?
There are great alternatives to college like trade school. Plumbers, electricians and other skilled tradespeople do very well if you have good skills and can start your own business.