A common belief instilled in todays generation is that you must go to college and get an education, so you can get a well-paying, reliable job. However, with growing tuition rates, the cost of college is almost detrimental to some and most start out buried in debt. This has called college into question. Do the benefits of a college education still outweigh the costs?According to recent studies, students graduating from a 2-year vocational/technical school will accumulate an average of 10,000 dollars in student loan debt. A graduate from a 4-year college or university averages at 26,600 dollars in loan debt. This cost can rise if the student attends a private or for-profit university.
For students who continue to graduate school average at 43,000 in student loan debt and again can increase if they attend a private or for-profit school. Students continue to study law or medicine can easily accumulate a 6-figure debt in student loans which includes loans for residencies and bar exams. According to the Association of American Medical Colleges in 2015 graduating doctors averaged at about 183,000 in student loans without inclusion of their undergraduate student loans. Unless you are paying out of pocket, the first step for most students after admission to their schools is to figure out what types of loans you will be getting or can even qualify for.
You can qualify for grants or earn scholarships which you don’t have to pay back but that typically doesn’t cover the cost of an entire tuition. For the average student, they would apply for their FASFA and complete the aide application. Then they would see what types of grants, and loans they could qualify for. This is based on their status as dependent or independent, how much income is brought in by their parents or by themselves or if they have a “high financial need”.
In some of these cases, specifically those students who make less than 40,000 a year and have dependents of their own, could receive the Pell Grant which could award up to 5,920 dollars per year. For those who do not qualify for high paying grants and even those who do, it typically doesn’t pay for everything needed. The student then needs to look at loans available to them. The most standard federal loans are the Direct Subsidized loan, Direct Unsubsidized Loan, Direct PLUS loan and the Direct Consolidation Loan. The Direct Subsidized loan are loans available to undergraduate students who demonstrate financial need. The Direct Unsubsidized Loan is available to available to undergraduate, graduate and professional students but is not demonstrated by financial need. Direct PLUS loans are made to graduate or professional students and/or parents of dependent undergrad students to assist in paying for tuition not covered by other sources of financial aid and is not based on financial need but requires a credit check.
The last federal loan is the Direct Consolidation Loan and it allows you to combine all your loans into a single on which is provided by a single loan servicer. There is a maximum on what you can borrow in federal student loans every year. It depends on if you are a undergraduate, graduate, professional student or a parent.
As a undergraduate student, the maximum you can borrow per year in Direct Subsidized Loans and Direct Unsubsidized Loans is between 5,500 to 12,500. This can vary due to your dependency status and what year in college you are in. As a graduate or professional student, the maximum you can borrow is up to 20,500 per year in Direct Unsubsidized Loans. If you are a dependent, you parents can receive an option for the Direct PLUS Loan to cover what remains of your tuition costs not covered by other sources of financial aid. Student loans are still considered loans and thus have interest when paying them back. The interest on federal loans is fixed and usually lower than most on private loans. These rates can get tricky if you are receiving multiple loans since they can vary on the type and is also rated on when the “disbursement date” was. The rates are evaluated yearly.
The most recent rate for the Direct Subsidized or Unsubsidized Loans for undergraduate students is 5.05%. For graduate students, the Direct Unsubsidized Loan interest rate is 6.
6%. The Direct Plus Loan for Parents of Students, Graduate or Professional Students the interest rate is 7.6%. On top of interest rates for loans, there a loan fee which are a percentage of the total loan amount. This fee is deducted from each loan disbursement that you receive each semester while you are attending school. Meaning, the money you get from the loan is less than what you technically borrow. However, you are responsible for responsible for repaying the entire loan not just the amount of money that you received.
Though the cost to attend college is growing every year, there are still benefits to attending. The most obvious is being the potential for greater earnings. The United States Census Bureau states that there is a positive association between degrees and a person’s yearly salary. The average salary’s being 25,600 or less for less than high school education, 35,300 or less for high school graduates, 38,300 for some college/no degree, 41,000 for associate degrees, 59,000 for bachelor’s degrees, 69,000 for a master’s degree, and 80,000+ for a PhD or professional degree. Greater job opportunities are another factor when considering college. The Bureau of Labor Statistics in 2016 stated, “approximately 37% of the jobs and occupations listed in their occupation handbook require a college degree.” (Atlas, 2018). In 2016, the current percentages of required post-secondary education was 2.
6% for some college/no degree, 6.0% for post-secondary non-degree, 2.4% for associate degree, 21.3% for bachelor’s degree, 1.7% for master’s degree, and 2.5% for PhD or professional degree.
Employers tend to require these degrees or more because their employees tend to have a greater ability to thing, a stronger ability to work in groups, ability to solve a task until the end and a measure ability to understand aspects of certain matters. These are considered very admirable qualities in employees. Graduates with degrees also have higher job satisfaction. Though not true in all cases, those with degrees tend to have a greater variety when choosing jobs. In an average life, we spend over half of it working. As money, benefits and job advancement are the greater factors in choosing a career, satisfaction is also one.
The majority consensus is to choose a job you will like, and you won’t work a day in your life. Studies have shown that graduates have a greater chance to acquire better benefits from employers. Health Insurance through employers especially make this true.
70% of those who graduated with a four-year degree receive adequate health insurance while less than 50% of those with only a high school diploma received a comparable benefit. Graduates also tend to have better access to retirement funds, tuition reimbursement, child care, travel costs and life savings. Another factor is job stability. With jobs frequently making cuts and laying employees off, employers tend to cut from the bottom. Those are the jobs that do not usually skilled labor.
According to the Bureau of Labor Statistics, “During a recession, the unemployment rate among college graduates is substantially lower than the unemployment rate among employees with only a high school diploma….having an associate degree suggests that you will be 30% less likely to be unemployed. By earning a bachelor’s or master’s, this same data suggests that you will be 48-56% less likely to be unemployed”. (Atlas, 2018). Some of the jobs that have been reported to have the best security during a recession are nurses, school teachers, accountants, judges, doctors, air traffic controllers and college professors. A factor that some must think about is benefits to our children. It isn’t often thought that a degree could and would directly affect that individual’s child.
Children of graduates are normally better off economically and socially. Studies have proven that a household than has one or more graduates with a college degree will directly influence generations to come to attend college. Another study between 1970 and 2009 has shown that the health of a woman’s children has a decreased mortality rate when the mother achieved higher education. Final benefits of college can include enhanced ability to make good choices and communicate effectively and efficiently. College can provide students with knowledge on how to break apart and solve problems, and how to think critically which is required in many job fields. It has shown that earing some type of degree has proven to make individuals better at making investment plans or starting a business.
Effective communication is key and can be considered a most valuable attribute. It is key in most aspects of life and an education can directly impact a graduate communication skill. To be able to communicate concisely, clear and in some case persuasively can help a graduate attain a desirable job. There are many aspects to consider when choosing if college is the right decision. Cost is one of the biggest factors in those who choose not to continue their education and can be a very real hurdle in their life. Depending on view, some might consider it not worth their investment of money or time.
It isn’t an immediate payout and for some this is needed. Though when considering all the aspects, you must consider what one is wising for in the future. Job stability, earning potential, benefits for yourself and your children, job satisfaction and a wider range of job opportunities have shown that even though it could be expensive to attend, with the right attitude and proper planning with borrowing and paying off student loans, the benefits of college outweigh the cost.