To make sure the return on investment (ROI) for attending college is a good career choice, planning needs to happen before the student loan paperwork is completed.
They say college grads on an average make more than non college grads. I wonder if those statistics take into account net earning after student loan payments?
There has been alot of buzz lately about the Feds plan to help relieve student loan debts. Investing in student loan forgiveness seems to be after the fact. Shouldn’t the investment go into career and financial counseling pre-college to make sure that students are making good choices and enter college with a specific career goal and financial plan on how to pay for it?
Going to college just to go in hopes you will figure it out along the way is not necessarily a good financial investment especially if you have to borrow the money. This pertains to traditional age college students as well as returning students and professionals seeking “professional development”.
The average starting salary for a new college grad is approximately $48-50K. The average starting salary for graduates with just a HS education is $31K. The gap increases over time suggesting that down the road as professional’s college grads have more earning potential. But what about those student loans?
First of all we shouldn’t assume college is for everyone. Too often students leave college with no clearer plan than when they entered but with more debt.
Students need to have a better understanding of career options and the occupational outlook for their chosen field in their labor market including average annual wage. Loan forgiveness might make more sense to draw graduates into characteristically low paying careers like teaching or non profit or public service. Students should also have a plan to observe and learn about as many careers as possible pre- college. They should also have a plan B.
College in general is a good and enriching experience on many levels however it comes at a cost $10,000-$35,000/yr. Students and parents need to assess the return on that investment for that experience and the potential it may afford.
Managing debt after the money is spent seems to be backwards. Managing spending based on good planning and goal setting makes a lot more sense.