How much is too much? A December 2010 article by Scott Cohn for CNBC explains how rapidly rising tuition costs and sour state budgets have been putting more education expenses on the shoulders of students. Whether parents had saved for their child’s education or not, students would need loans. American student loans are expected to total more than $1 trillion in 2012. What do graduates have to show for it?
One young couple who married between undergraduate and graduate programs share debt greater than $250k (what should have been their first mortgage).
Graduates with masters degrees work low wage retail jobs they could have obtained with just a high school diploma.
The default rate on student loans is 2x greater than it was in 2005. Those graduating 5-10 years ago had internet and technology companies growing rapidly which wanted to hire fresh, young minds. The economy in 2011 demands experience, but not so much that you are entrenched in your old ways of business. A tricky balance.
Growing up, I was always told the importance of getting a college education. College wasn’t some luxury or fall back plan after high school; it was the natural next step in growing into adulthood. My whole point of this post is that astounding number, 1 trillion. I know that hard work will eventually pay dividends, and I am lucky to count myself among those with no other kind of debt. Additionally, I have heard in the coming decade 3 out of 4 jobs will require higher education, so the future outlook is promising for those with degrees. With any luck we’ll be able to pay off our $1 trillion debt and invest in our children’s future. You know they will need it.