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The College Debate: Not Worth the Debt?

October 16th 2014 by
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For most teenagers, college is the natural next step after high school. Our culture has made it feel almost like a necessity in order to excel.

The Wall Street Journal recently published an article sharing stats on college graduates and debt. Although it shows people have less faith in a college education than they did just four years ago, the story is not black and white.

The Stats Concerning Everyone

The Federal Reserve Bank of New York reported about a quarter of college graduates are barely earning more than those with only a high school diploma. This puts the underemployment rate at 46% – a 20-year high.

Here are some other numbers from the article:

  • 70% of students graduate with debt, most with more than $30,000
  • Most students need at least 10 years to pay off their debt
  • 1 in 10 graduates is at least 90 days late on a payment
  • Most students cannot finish their degree in four years
  • Nationally, student loan debt is at $1.1 trillion

However, there is another side to this as well.

Majority of College Graduates Succeeding

The median income of someone with at least a Bachelor’s degree is $48,000, while the median income for a high school graduate is $25,000. This graph shows the difference in rate of pay over the years:

Graph On Rate Of Pay

What’s more, it’s becoming increasingly difficult for high school graduates to find jobs – more so than those with college degrees.

So what does this tell us? A college degree does not guarantee instant success. It’s an investment you can hope will pay off in the long run. Things like your major, school, location and grades will all factor in as well.

Tips for Managing Your Student Loan

  • Know what your grace period is. Student loans often give you several months after you graduate before you must begin payments. It’s best to start as early as possible, but it helps to know when you must start.
  • Familiarize yourself with different payment plans. Your lender may let you make income-based payments, consolidate your loans or set up a fixed payment schedule. Know your options.
  • Work with your lender if you’re having trouble. If you’re in trouble, don’t ignore your debt. Many lenders will give you a grace period if you’re unemployed, so just ask for help if you need it!

How have you managed your student loans? Any advice for recent graduates?


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