Monday, October 22, 2012

Student Loans and College ... Here's the Real VALUE Deal ... Get the Most Education for the Least Cost Possible

Student loans outstanding are greater than credit card debt balances today.

Lest we jump to the wrong conclusion, however, not all student loans are bad. That said, however, they aren't all good either.

As is the case with most simple to ask but not easy to answer questions, the best answer to the question of whether student loans are bad or good is "It depends."

Student-loan debt is a good investment, written by the President of Gettysburg College, makes the case that the benefits associated with getting a college education are well worth the student loans incurred while doing so. Here's what she has to say:

"The public discussion about college student debt feels anything but informative. For example, a recent headline noted that “Nearly 1 in 5 households carry student loan debt,” implying that 1 in 5 is too many. I would have written the headline to read, “Only 1 in 5 households carry student loan debt.”

Have we devalued one of America’s most lucrative investments so much that we believe a $30,000 car loan is wiser debt than tuition? Have we forgotten about the significant impact that a college degree has on quality of life and earning power over a lifetime? 
There is no question that many students today graduate from college with debt. It’s an important issue for us to think about as a society, and we don’t want our young people to be overburdened with it. . . .

A Wall Street Journal piece this summer reported that fewer than 1 in 4 college graduates in the U.S. have debt exceeding $30,500. . . .

But is this money well spent? 

History has demonstrated that investment in higher education is indeed sound. The unemployment rate for young high school graduates last year was just over 31% compared to just over 9% for young college graduates, according to the Economic Policy Institute. And the U.S. Census reports that lifetime earnings of college graduates exceed those of high school graduates by more than a million dollars. . . .

Attainment of a college degree does not ensure success any more than the lack of a college degree precludes success. But the statistics don’t lie.

For years it has been the case and it continues to be true that a college education increases the likelihood of full-time employment and a higher salary level. It also helps to prepare the educated citizenry that is so essential for the success of our democracy.

For some reason that doesn’t make the headlines. But that’s the real story of higher education in America."

Summing Up

Let's all agree that getting a college education today is a worthy aspiration for the majority of Americans. Let's also agree that accumulating unnecessary debt to do so is not a good thing for most Americans.

So we can agree on two things right away: Avoiding unnecessary debt is a good thing; and getting more education is a good thing, too.

Accordingly, getting the most education for the least cost is the absolute best route to a "valuable" education. 

And it's also a great way to learn a valuable life lesson at the same time.

Thanks. Bob. 

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