If you’re a young person, you may have noticed that college prices have gone up quite a bit.
In fact, if you haven’t noticed that, you’ve been living on Mars. Colleges are demanding ever more money and students are going into ever more debt.
What is so strange about the whole debate about college fees is how the underlying causes are never discussed. Why would the price of something just keep going up way above inflation?
Well., one of the reasons is actually student debt. Student debt, compared to other debt, is actually quite cheap. It is made cheap by the fact that the interest rates on the loans are partially financed by the government.
In addition, college debt is only repaid when you start earning money, unlike other debts. So again, the cost of going into debt for college students is lower than it would be if you just got a loan from the bank.
But this has had a couple of effects. The first is that colleges and universities have put up their prices.
After all, if students can take on as much debt as they like today, then they can afford to pay tens of thousands of dollars a year.
The other effect is that students are saddled with huge outstanding debts. This means that once they enter the workplace, they’re paying them off for decades to come.
Once they get out of college, options tend to be limited. There just aren’t enough middle-class jobs to go around once people leave university. In fact, the US middle-class is in a long-term decline. And the US economy is hemorrhaging hundreds of thousands of middle-class jobs every year.
On top of this, once you’ve graduated, there is a chance that whatever job you get, you’ll be paid less than previous generations. That means that the benefit of a college education may be outweighed by the cost.
So what are your options? One option is to get a job in the public service which may entitle you to public service loan forgiveness. You can also apply for student loan forgiveness or learn how to refinance student loans.
These programs can shave a percentage off your monthly repayments and make your outgoings more affordable. There are even programs that reduce your monthly payments to $0. But, remember, you may not qualify.
Another option is to start making smart decisions today. Different courses have different financial prospects. For example, if you do a degree in science, mathematics, engineering, economics or law, you’re likely to get a better-paid job.
That’s because the marketplace demands people with these skills, yet they’re in short supply. Other subjects, like liberal arts, may be more fun, but they don’t pay as well, yet command the same level of debt.
Both of these options make the lure of college more attractive. But if you’re an ambitious person it’s no longer clear that you should go to college.
Mounting debts and bleak job prospects mean that many people would be better off starting their careers early. Spending more time building up your work experience may prove to be a bigger payoff overall.
Pohot Credit: simple.wikipedia.org