Degree Worth the Debt?

Financially it isn't worth it to rack up debt getting a teaching degree. If I had started cleaning toilets instead of studying I am pretty sure I would get a greater total life income.

 

In retrospect, I think I made a mistake accepting an offer that came with a large "tuition postponement" package, and should have applied again the next year for a more favorable deal. Oh well, I guess I didn't make the most out of that degree either.

 

I think this is a major problem with our society. We have built a monster with our post secondary education system. Colleges and Universities have become so large that they need a steady stream of students paying a tremendous amount of money to maintain themselves. The problem is that many of these students are not deserving of going to college. Fifty years ago the people who went to college had the brains to get into college. Now, just about everyone goes to college. Many of these students are getting degrees which in no way prepare them for a career or their degree is in a field that in no way can pay for the education they received.

My buddy's ex-wife went to Tufts University for five years and got a degree in "social work". She graduated with over $100K in debt and got a job at "Project Bread" which is a food shelter, which paid $20K per year. If my buddy hadn't of paid off her debt while they were married she would still be paying it. Needless to say it wasn't a very fair divorce settlement as he got no credit for paying off all of her debt.

I was at a seminar in which the speaker was the Dean of Accountancy at a private college. He flat out said that at least 50% of the students at his college have no business being there.

 

While I agree that a lot more people go to college than they used to, it's not correct to say "just about everyone goes to college". I looked it up, and unless "just about everyone" includes 38.5% of people living in the US who are at least 25 years old, most people still don't.

However, that percentage is about 10% more than what it was 30 years ago, so I agree with your initial statement that more people are going to college these days. I just don't think it's "just about everyone". But you'd think that as more people go, the cost per person would go down, not up. You'd think that the overhead costs of running the college would be spread out over more students. That evidently doesn't happen, and I don't know the reason for that.

To the topic at hand though, the answer for the people in the link is college was definitely not worth it for them. But there's three points to be made here.

1. The cost of going to college has risen dramatically. I graduated from college in 1996 (bachelor's degree) and had about $20,000 in loans, which at the time represented about half the cost that my undergraduate education - the college I attended was about $10,000 per year. That same education today would cost about $25,000 per year. (I received grants for my graduate work, and so my master's didn't cost me anything.) Now I don't live in a fantasy world, and everything costs more today, but a 250% increase in cost over 15 years seems excessive. Hell a decent public university costs about $20,000 per year these days. But college graduates earn an average of $1 million more over the course of their careers than non-college graduates, so for the typical person it's still "worth it".

2. Some of those people looked really young, like they've only been out of college for a few years. You really need a reality check if you think that your college degree is going to let you walk into a high paying job straight out of school. My first job after receiving my master's degree paid just $28,000 per year. I had to put my time in, take another job that paid about $35,000 per year, and work my way up to my current salary. Saying "college wasn't worth the debt" when you've only been in the job market for a couple of years isn't realistic.

3. When considering the debt you want to take on, you have to look at the career you plan on persuing when you get out of college, and what salaries the people have in that profession. The jaw-dropping example in BTA's example was the married couple who were both social workers who had a student debt of $240,000. How can you possibly think it's an OK idea to take on $240,000 in debt if you're planning on becoming a social worker? That exceeds the amout my brother borrowed to go to medical school, but when he got done, he was a doctor and therefore knew he would earn a salary that would enable him to pay his loan off.

So for some of these people, their first class should have been Reality 101.

 

OK, I get that, but when I was 18, I knew that social workers weren't pulling in 6-figure incomes. I'm not expecting your typical 18-year old to make grandiose debt-payoff analyses, but they should be able to realize that it's going to take a really, really long time to pay off $240,000 in student loans, if the career you're pursuing pays in the 30s. They should be able to realize that 240 is a lot bigger than 30.

I agree with that. Plus, if you go to a state school, and plan on living in that state after graduation, chances are there wil be a lot of alumni there. I grew up in Pennsylvania, and there are so many Penn State grads working in the state, that going to Penn State isn't a bad choice at all. While htere are a great many private schools that may get you a better education, there aren't many employers in PA that will look down their noses at you because you went to Penn State - quite the opposite in fact.

I also agree that work experience tends to trump education. A good education indicates that you have the potential to be a good employee. Actually performing your work duties at a high level proves you can be a good employee.

 

Isn't part of the issue then that social workers and teachers are getting paid too little? If it needs an expensive degree and it is work that needs doing how come it doesn't pay?

 

Undergraduate degrees are free here. I was lucky enough to have my parents pay for my master's fees (€7,500) and rent for the year while I paid for my living expenses through savings from my part time job when I used to live at home. So I had zero debt leaving college. I'm glad I don't live in America.

Some things are kinda similar though. Lots of people go to college because they feel they should and many study whatever they want to with no thought as to what they'll do when they finish. Obviously they're much better off not being in debt but they may as well not have gone to college. At the same time we can't get people to study IT or science where there aren't enough workers for the jobs. I'd be curious if the free fees have made this aspect worse than elsewhere.

My understanding wasn't that the main advantages of the Ivy League is unrivalled teaching. The main long term benefit over cheaper colleges is arguably the network of people you build up while there. Your classmates are much more likely to be high fliers or rich and in twenty years time there's much more chance that they can pull better favours for you than others.

 

But there's no reason to rack up $240,000 in debt - no degree is that expensive. Like I said previously, doctors who go to medical school and need about eight years of education don't rack up that much debt. How long was this guy in school? Is he Chris Farley from "Tommy Boy"?

Like BTA said, you can become a social worker without an Ivy League education, and you'd be foolish to go to a very expensive school if you want to be a social worker. It's just a really poor return on investment.

Here's the other thing that kind of builds on work experience trumping education - higher education trumps lower education. If you get a graduate degree, it ceases to matter where you got your undergraduate degree. It doesn't matter if you got your undergraduate business degree from Podunk College if you went to Wharton for your MBA.

 

My degree probably won't be worth the debt. But considering I only have to start paying back when I start earning a certain pay bracket it's also unlikely to be a major concern for quite a while. My best friend has elected to start paying off her loan whilst she is still staying with parents and she's regretting that decision already.

Overall I don't think I'll regret doing my course, I pretty much need a piece of paper to say "I can do stuffs" to be employable and even then that is a slim hope of a potential career.

In the UK the loan gets written off after 10/15 years if you're not earning the pay bracket they expect and I can imagine it being very evident the plethora of courses being guilty of such a thing, considering you can do courses in things such as music appreciation and the like as universities like to employ courses that make them look more populous, with opportunities for the local community to get more involved in higher education (ie making university a simple option for those who would otherwise opt out)

As someone else put online, university is like unemployment - only your parents are proud of the latter.

 

My wife's parents paid 4 yrs of college for her. She paid(signed for loans) the next two to receive a Masters she doesn't use. She started over in a unrelated field and got a PHD. When we bought our house about 5 years agao, she already had over 100k of debt from her school loans. Luckily I had no debt. We are still paying them. And will be for a bit longer. Was it worth it? yOu bet ya! She makes pretty big money adn her potential earnings are still rising and will continue to do so in her field, as her degree opens up all sorts of doors for her. Possibly a pratice later on.


Not all degrees will get you there though. You need to be picking the right field to enter the workforce in. Teaching doesn't pay alot here in Rockford, but Engineering could. The medical field is a shoe in for decent pay. So is a law degree. I make decent money as well, utilizing a Customs Brokerage License. No degree is necessary to get your license. Just pasing a very hard test. Many lawyers I work with also have their Brokerage License and tell me the test were definitely on par with each other.

You don't need a degree to be sucessful financially. It sure can help though. But is the Degree worth the debt? In most cases, I would have to say yes.

 

I've been employing people for finance and accounting roles for years. Some of the people who have been the best at the job and have gone on to earn the most money have been people with the most minimal education qualifications (and vice versa). As an employer, I am very cynical of the value of degrees and qualifications. NOTHING trumps a good attitude and some common sense, and that is pretty much all I interview for.

 

The there's the aspect that a lot of what you learn you never have the opportunity to apply. There are some exceptions to this. Obviously, doctors apply what they learn in medical school - although probably little of what they learned as an undergraduate. Same thing with lawyers - yes to what they learned in law school, no to what they learned in undergraduate school. I use very little of what I learned to get my degree in my present profession.

 

I'm on my first year at college. I already don't know if its worth it. Its boring and I don't know if I will have a good job in the future. I'm thinking of going to college, but spending not too much on time on it.