College debt is big business in the United States, with 71 percent of all college graduates carrying student loans with an average debt level of $29,400 per person. With numbers like that, many are wondering whether it is worth going into debt to earn a college degree. The answer to that question largely depends on the type of degree you plan to pursue and the earning potential that degree will afford you once you graduate. Read on for some guidance about things you should consider when thinking about how to finance your college education.
The Wage Gap Exists
The bottom line is that college graduates with a bachelor’s degree still earn significantly more than those with only a high school diploma. According to data from the Economic Policy Institute, graduates earned 98 percent more annual than non-college graduates in 2013. And according to the Pew Research Centre, adults ages 25 to 32 with a college degree earn about $17,500 more annually than their peers who do not have a college degree. But while the value of a college degree is clearly rising, this rise does correlate to the jobs available within a specific field.
Choose Your College Wisely
A smart way to help ensure that you won’t end up with a student debt load you are unable to handle is to cut college costs wherever possible. In many cases, this means opting for a public, in-state school rather than a private school or one that’s out of state. If you can live with family while attending college rather than in dorms or in an apartment, that will also greatly reduce your potential debt load. Also make sure to fill out the FAFSA (Free Application for Federal Student Aid), which qualifies you not only for low interest student loans but also for grants, scholarship programs, and work-study. Depending on the field of study you’re choosing to pursue, you may consider taking some classes at community college to cut costs.
Think About Earning Potential
Some degrees are more valuable than others. Visit the U.S. Bureau of Labor Statistics Operational Outlook Handbook online, which details how much you can expect to earn in specific careers as well as how many jobs are projected to be available in that field. Choosing a major where you’ll earn enough to pay back loans is critical, but it’s also important to choose a field with plenty of job growth and upward mobility. While considering your interests is important when selecting a career, it shouldn’t be the most important factor if you’re planning to go into debt to earn a college education. Talk to people in the field you’re considering to find out what jobs exist in your region. While college debt is, in general, worthwhile, doing your research and planning ahead can help ensure that it will be worthwhile for your specific situation.