How Much is a College Education Worth?
I loved my college education so much that I’m still paying for it! Seriously, though, I went to Oglethorpe University, a very good, very expensive, 4-year private university in Atlanta. When I attended, tuition was about $12,000 a SEMESTER, not including room and board. The smart cookie that I am, I paid for most of my education with various scholarships, federal loans, federal grants, and work study. Additionally, for three years room and board was covered by my job as a resident assistant. I’m sure you all saw that I tried to slip federal loans in that list, hoping you wouldn’t notice. It’s true, I left school with debt just like two-thirds of my fellow graduates, according to finaid.org, an online resource for students and parents.
I was lucky and escaped with only $7,000 worth of debt. My sister left GA Tech, a public institution, with over $15,000 worth of debt. I’ve heard of fellow Stormy Petrels graduating with $20,000+ in loans. I also have friends who went to smaller state schools, like the University of South Alabama and even Georgia State who owe nothing and have great, well-paying jobs.
One question students and their families need to ask is how much can they afford now and in the future to spend on college. In the May New York Times’ article Placing the Blame as Students are Buried in Debt columnist Ron Lieber explores the trend of rising student loan balances and students’ abilities to pay them off. He notes:
According to the College Board’s Trends in Student Aid study, 10 percent of people who graduated in 2007-8 with student loans had borrowed $40,000 or more. The median debt for bachelor’s degree recipients who borrowed while attending private,
nonprofit colleges was $22,380.
Lieber also likens this growing trend to the subprime mortgage crisis and questions who is responsible for allowing these students to become so deeply buried: the parents, the schools, the loan companies?
Jane Klemmer’s blog, Balancing Education Dreams with Smart Debt Decisions, goes one step further and urges students and families to think about the whole fit–financial included–of a university before setting their hearts on attending. Klemmer also suggests visiting “http://www.mappingyourfuture.org/. This website offers a myriad of useful information, but one of its best features is the calculators which enable you to project forward and estimate future debt payments, based on expected borrowing and interest rates. One of the calculators even suggests what someone would need to earn monthly to comfortably pay back his or her student loans.”
Remember, knowledge is power. Make sure you know what you are getting yourself into before you take on thousands of dollars worth of debt. If you know you’ll eventually be an investment banker making six digits a year, you might be more comfortable with the potentially high monthly loan payments. Do your research; ask questions. But don’t forget that it is very difficult to have student loans discharged, even when filing for bankruptcy.