Higher education advocates cite the United States Bureau of Labor Statistics (BLS) findings that college graduates make, on average, twice as much a week as a high school graduate and have a 50% lower unemployment rate. In January 2021, the United States Federal Reserve reported that there was $1.57 trillion in outstanding student loan debt among 45 million borrowers with a 11%, and rising, student loan default rate. Higher education can be a pathway for a long and successful life and career, but it can also be a pathway for ruinous lifelong debt.
Higher education students must look with a critical eye to spurious statistical “claims” of the need for higher education for everyone.
First, higher education is not a requirement to a successful career. The United States college graduation rate hovers just above 50% – this means that millions of students start and do not complete their undergraduate or graduate educations. The failure to graduate from higher education delivers these former students into the labor force with high debt and a challenging future to repay debt with limited career options. A high school graduate with some higher education is a severe risk for future financial problems.
The bottom line: Only go to college if you want to go. If you go, then finish.
Second, many critical roles as entrepreneurs, health care technicians, construction specialists, plumbers, electricians, and other specialties have great incomes and minimal secondary educations. Community Colleges are the unsung heroes of middle-class success, especially their short-term certificate programs. If you are unsure, you want college, if sitting at a desk in a job makes you nauseous, and you want to start a strong career, then community colleges can provide an excellent gateway into construction, service, and health care trades that are booming across the United States.
The bottom line: Community colleges offer excellent trade education with minimal cost and above average career potential.
Third, look at four critical statistics when selecting a college. There are four critical statics to evaluate when selecting a college: (1) graduation rate, (2) average student debt at graduation, (3) percentage of students successfully paying of their debt, and (4) net tuition after non-loan financial aid. When selecting a college, student outcome is all that matters. A school’s brand, if it is public or private, if it is profit or non-profit – none of these element’s matter. All that matters is the historical record of accomplishment for what the school produces for its students. A prospective student should look for a COMBINATION of (1) graduation rates >70%, (2) average student debt less than $6000/year, (3) student debt payoff rates >75%, and (4) net tuition (out of pocket) less than $15,000 a year. Using these metrics, students will find large state schools, large private universities, and strong regional schools as their best choice to graduate on time with minimal debt.
The bottom line: Seek schools that have high graduation rates, low debt with low cost, and high student debt pay back rates to find the best outcomes.
Fourth, schools are not your friend. Higher education institutions are a business that does not treat its customers, students, as well as it should. The student debt crisis is a crisis created by schools enrolling students, driving students to take on outsize debt, and then not seeing the students through to graduation. Students need to find schools to guide them to the industries of the future such as Computer Science, STEM, Health Care, Medicine, Data Science, Logistics, Energy, Business, and other related fields that are the future of the economy. Any school that encourages a student to take on $100,000 in debt to enter a profession making $40,000 is only helping the school and driving the student towards financial ruin.
The bottom line: Students should be highly skeptical of higher education claims and select degrees with immediate commercial applications.
Fifth, prospective students should create their own financial assets for college. A “skip” year working, enlisting in the military, or working for AmeriCorps can finalize their career goals, earn their own money for college, and determine if which, if any, higher education path is right for them.
The bottom line: Every dollar a student brings to their higher education goal is one less that must be borrowed and repaid.
Higher education is and will continue to be a great asset to students if it advances each unique student’s career aspirations in a financially responsible manner. Students need to match their career aspirations with the higher education requirement and not vice versa. Students looking to enter lucrative and productive career fields can find their goals met through community colleges and/or certificate programs. Most importantly, caveat emptor, Latin for “let the buyer beware” should be at the front of every student’s mind. Education statistics from the US Department of Education reveal who is stellar and who is a scammer in the field of education.
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