Despite Soaring Costs, College Still Pays

Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Ouch. In fact, one authority on the subject said, “in the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college.”

Nevertheless, 2008 bachelor’s degree recipients’ median earnings were about $22,000 more than high school graduates, and their unemployment rate was far lower.  The investment can clearly pay off over the long haul, but it’s far more painful a burden than in years past.

One thing is for certain, before taking on the debt load, students need to make sure they are committed to making their education pay off. Unlike most other debt, student loans generally cannot be discharged in bankruptcy, and the government can garnish wages or take tax refunds or Social Security payments to recover the money owed.  They do have other perks, though, as covered in our adjacent blog post.

And be wary that the degree you’re obtaining will really open the doors you’ll need to get past that pile of debt. Tragically, students who borrow to attend for-profit colleges are much more likely to default. Many experts point to the lack of weight those degrees carry with potential employers as a significant factor. While they make up only 12 percent of total enrolled students, they account for nearly half of those defaulting on loans.

Source: New York Times