#CollegeGrads #employment #jobs #StudentDebt
It may be the best time to graduate college since the Great Recession. But they are still not great.
So writes Ruth Serven of The Kansas City Star. Her story was published July 3, 2016, in The Atlanta Journal-Constitution.
The unemployment rate for college grads is less than 5 percent, and job prospects are getting brighter, Serven writes. But 45 percent of those recent grads have jobs that don’t require their degrees, according to the Federal Reserve Bank of New York, Serven writes.
Though there is more work available, grads still face stagnant wages and the highest debt load ever, the article says.
In fact, 42 million people owe $1.3 trillion in student debt, according to the cover story in the August 2016 issue of Consumer Reports magazine, which condensed and reprinted an article by Reveal from The Center for Investigative Reporting.
“I feel I kind of ruined my life by going to college,” the CR article quotes Jackie Krowen, 32, of Portland, Ore., who owes $162,000 in student debt.
We’ve recently discussed this topic in this space, but it bears hearing another perspective.
Many graduates are coming out of college with debt the size of a home mortgage. How can they be expected to 1) buy a house? 2) begin saving for retirement? or 3) buy some of the essential things they need to live a decent life?
On top of the debt, the students’ expensive education is not giving them work that would be worth the investment, in many cases.
Also, some students are getting calls at all hours with prods, if not threats, to make payments on that debt.
Though most consider a home mortgage not just productive debt, but an actual financial vehicle, college debt, without having a commensurate job to make its burden light, is not productive debt.
Certainly, all education has value. But some education has more value than others. If a student goes on to be a doctor, for example, and goes into debt to make that happen, that’s, more or less, expected.
A medical practice can be lucrative and usually, before the doctor gets too old, it is usually paid off. Some even practice medicine in less lucrative places, in exchange for some eventual debt relief, among other inducements.
But if one studies, say, the liberal arts, and goes into debt to pay for that education, it’s very possible, even likely, that, if he gets a job at all, it will not be terribly lucrative. The student debt, therefore, becomes perhaps a lifelong burden. As that student ages, the burden may be so great that he will retire with little or nothing to help him get through old age.
Fortunately, there are solutions that don’t involve stiffing one’s debtor. There are ways to earn an extra income for a few part-time hours a week that might not only pay better than the job you are doing, but has the potential to make you financially free eventually. For one of the best, visit www.bign.com/pbilodeau.
By all means, before a student decides to go to college, sit down with parents and other advisers and do the math. If you have to borrow money to cover most of the costs, think about how you would pay it back. If you don’t have a good answer, reconsider your future.
Colleges and universities, too, should contemplate their futures. How good would it look to produce thousands, even millions, of graduates that are so crushed with debt, they’ll be paying on it forever? Someone needs to retool education to prevent this.
We have a love-hate relationship with education. We may love it while we’re in school, but, when we graduate, often we don’t love it nearly as much.
Peter