We are often told the typical track to success is to go to college, get a degree, and then a job, but because of the increasing cost of higher education, a growing number of people are beginning to abandon it. Student loans are often what people turn to in order to combat these rising costs, however, this option comes with considerations of its own. With the continuous rise in education costs, does the traditional path to success still make sense for someone considering loans to fund all or most of their higher education?
Americans have about $1.6 trillion outstanding in federal student loan debt. As of 2019, the average college graduate incurred about $28,950 worth of debt. In the last 30 years, higher education tuition per academic year has increased due to inflation from $4,160 to $10,740 at public institutions and from $19,360 to $38,070 at private institutions. All the while, the average college graduate is expected to make only $55,260 as of 2020. For people without a degree, their expected earnings start at $38,792 after high school graduation.
There is some hope for students who do choose to fund their education with loans. For students who have already borrowed, there has been a suspension on current loan payments stemming from the Covid-19 pandemic in effect as of March 13, 2020. However, the pause on repayments is expected to expire on August 31, 2022. President Biden is considering forgiving up to $10,000 in federal student loan debt per borrower. A decision on the matter is expected to come this month.
Choosing whether to go to college or go straight into the workforce is a major decision every young adult must eventually make. The cost of higher education has only risen over time and will likely continue to do so. It is up to the individual to decide if financing all or some of their education is the way to go or if student loans are a viable option. Either way, a person should carefully plan and consider the possible of effects whatever they decide and must be fully prepared for what’s in store.