Is College Worth Going Into Debt For?

The choice to pursue a four-year degree after High School is not an easy one. Broadly speaking, you are promised higher-paying jobs and more demand in the job market, but are expected to spend exorbitant amounts of money and forgo time gaining real experience elsewhere. So, is it worth it? Well, it depends, everyone is different and the answer varies accordingly.

The College Debt Numbers

From a general economic perspective, it’s still worth it to earn a college degree. On average, students that graduate with a bachelor’s, regardless of their major, will increase their earnings potential relative to their non-bachelor counterparts. They will, on average, earn over their lifetimes a “cumulative… $1.19 million, which is twice what the typical high school graduate earns, and $335,000 more than what the typical associate degree graduate earns.” (Hamilton, 2014).

The cost of a four-year degree “averages $102,000”, which means that even if you include the average $30,000 debt students graduate with, in pure numbers terms, it’s still worth it.

Unemployment Rate & Education for College Grads

There is also an opposite relationship between the level of education and unemployment rate– as formal education goes up, unemployment goes down. This means that if you go to college you are statistically less likely to be unemployed.

This, of course, gives no information about underemployment (whereby people have jobs they are overqualified for), but the answer is clear nonetheless: on average, it is better to go to college than not.

However, an average is just that, it gives a vague idea of where people stand, but nothing about the variability and true distribution of the population.

In truth, there are huge differences between university graduates’ earning potentials. Where you fall is largely determined by what and where you study.

What you study and how you pay college debt

There is a large degree of deviation within average lifetime earnings between majors. The forces of supply and demand are present in the job market; if you have an uncommon skill that is in high demand, you are likely to make good money, and the same is true of the reverse.

Engineers and statisticians have high average salaries because their skills are highly marketable, and there aren’t that many of them. Conversely, finding a high paying job isn’t so easy for say fine arts and religion majors. If you want to compare majors’ potential lifetime earnings, there is an interactive tool that allows you to do so side by side.

Median Lifetime Earnings for Select Majors (In Millions of Dollars)

Don’t let the numbers alone guide your decision though. You shouldn’t stop yourself from studying what you love just because on average it doesn’t “yield the highest return”. Think about it like an investment decision, your return must at least equal or exceed the level of risk.

The Level of Risk

“Risk,” in this case, can generally be defined as the probability of ending up in the same or worse situation than if you hadn’t gone to college plus the money and time you spent there. “Return” you get to define. It’s usually a mix between doing what you enjoy, and what pays. If they are one and the same you’ve hit the jackpot, if not, you decide how much weight you give each thing and determine if you’re intended major is worth the risk.

How You Pay For College

In this analysis, you should also, very seriously, take into account how you intend to pay for college and what that implies for your future.

Debt is no joke, and to take on such a large amount at a young age can have effects that ripple well into your mid-life. There are a variety of student aid programs, loans, scholarships, and grants that can help you get through college, but if debt is your main vehicle, then understand that it may take decades to pay off.

That being said, everyone’s preferences and situations are different. So if for instance you really have a passion for sculpting and making a ton of money right when you graduate is not a priority, then get that B.F.A and sculpt away.

But understand that the path to being a world-famous sculptor is narrow, and there is a high probability you may end up either working in something that marginally relates to the craft (such as a curator, educator, or industrial designer), or doing something completely different for which you have no formal education.

Your Making Adult Decisions

Further, you may find yourself making debt payments on that degree years after you’ve completed it whether you use it or not. If you fail to do good on those payments, that could affect your credit, and subsequent ability to do things like take out another loan, buy a car, or become a homeowner.

This is part of the risk you take when you choose the narrow path, so tread it carefully. Understand that these are real-life adult decisions with corresponding consequences. So it’s important to do research, weigh your options, and look ahead- then you can make an informed decision.

What School to Choose

What institution you attend, if you’ve chosen to pursue higher education, is also a decision with meaningful consequences. There are a wide variety of schools, and each offers its students different specialties, programs, services, networks, and experiences.  

As any college student will tell you though, you get out of school what you put into it. So if you’re passionate and hard-working, you’ll likely find a lot of value in the education, if not, you won’t.

The Difference Between Schools

That being said, it would be dishonest to claim that there were no differences between schools. Most tracks the average first-year salaries of their graduates by major and post the information on their websites.

You can find a good idea of where you’ll stand if you choose to attend a particular program from those statistics. For a general idea of earnings for the schools you are looking into, a rundown can be found here.

Yet there are also other intangible factors that go into choosing the right school. For example, if you want to attend a high-ranking university you are not only pretty much guaranteed a great education and solid networking foundation, you’ll also get the school’s brand name to tag onto your resumé. It’ll be harder to get in and probably more expensive once you’re there, but that’s the trade-off. Learn what tradeoffs make sense for you given your preferences and financial situation, and make a decision from there.

Consider Trade Schools

There are also other great options besides a four-year university that is worth looking into. There is a growing demand for trade jobs which don’t require the full 4-years of college or include the hefty price-tag. There are also highly paid associates degrees offered at community colleges which generally only take two years to complete, and are also very well rewarded. A typical liberal arts education may not be for everyone- an associate’s degree or trade certificate are great alternatives for those who don’t want to shell out the time or money for a full bachelor.

Conclusion

The decision to pursue education after high school is a very personal one. Once you’ve made up your mind, however, it’s important to plan out your finances before-hand so you’re not caught off guard when it’s time to pay for classes.

Also, and this cannot be stressed enough, once you start, it’s very important to finish and get your degree. The worst situation is falling into student debt, and then not receiving the benefits of a college diploma. Take the time to think about it. After all, it’s your life and your decision to make.