Adjusted for inflation, the cost of a four-year college education is over two times as much as it was between 1978 and 1979. In contrast, the median family income has only risen 20 percent since then. As a result, the majority of college students are also student borrowers. And, a recent report from the Federal Reserve Bank of New York conveys that around one in 10 student borrowers is behind in repayments.
In fact, student loans have the highest rate of delinquency–surpassing auto loans, credit cards and home mortgages. This is putting a clamp on the economy since the total student debt is at around $1.3 trillion. Young people are delaying marriage and home ownership just to pay off their loans.
Moreover, a Pew Research Center found that college-educated adults without student debt have around seven times the median net worth of those with student debt. That is a dramatic difference. One solution is to pursue majors that pay off such as those in the STEM fields. Continue reading to learn more.
Is the degree worth the debt?
In America, there was once a time where we could pursue our dreams and know we would always get a job somewhere. Even if our liberal arts major didn’t work out, there were jobs we could take to pay the bills such as in sales, working in customer service or retail. But, what if you have a six-figure debt and can’t get a good-paying job in your field of choice? Making minimum wage is not going to cut it.
Furthermore, you will have way too many sleepless nights wondering how you can have a college degree and feel even more broke than you did in your freshman year. It doesn’t make sense.
Well, the global job market has tightened since the great recession. And, while things aren’t as bad as they were between 2008 and 2011, they’re still not as good as they were in 2004 or even 20 years ago.
Employers aren’t as quick to give raises, many formerly full-time jobs have become part-time jobs with no benefits and the requirements even for entry-level jobs have gone up. In addition, many white-collar jobs in finance and technology have been filled with cheaper foreign labor because our government allows it and corporations want to increase their profits.
In recent years, large organizations such as Disney and UC Berkeley have replaced many of their salaried and full-time IT staff with cheaper foreign labor. Developers who have spent decades with each organization were traded for someone who requires a lower salart. This is why you need to seriously think whether your preferred college degree may justify the debt you can incur. Here are some options to consider instead:
- Community college to explore your options
- Enlist in the armed forces
- Enroll in school part-time and work part-time
- Attend a trade school
On the other hand, college is the best option when you know that the money you could potentially earn will cover the costs of the debt you are incurring. It also works when you have a substantial scholarship. Fax to email software can help you stay in communication with mentors who can advise you on the right scholarships and courses of study. Also, you should go to college if you can’t get your dream job without your degree. Degrees are an investment, if you pick the right degree. Here are five of the top-paying degrees.
- Petroleum engineering (starting salary: $101,000)
- Mining engineering (starting salary: $71,500)
- Computer engineering (starting salary: $68,400)
- Dental hygiene (starting salary: $65,800)
- Business information systems (starting salary: $58,600)
As you can see, many are in the engineering field. Yet, there are career options that don’t require a degree and can pay over $50,000 annually such as:
- Real estate agent
- Iron and steel workers
College is an investment in your future. There isn’t any question that a degree will open many new doors of opportunity. Just pick your major wisely.