Education Is An Investment Worth Making
Several weeks ago, I was visiting with a student who was trying to decide if he could afford to return to college next year. He was concerned about the cost of education and the impact of incurring additional debt. While he was receiving a substantial college grant, he was also taking out loans to pay for his tuition, as well as room and board.
He told me about his plans for the summer including his job, scheduled vacation with his family, and his plan to buy a new car. He had been shopping for a car for several weeks and told me that the new car was part of the reason he was debating the affordability of college. He intended to take out a loan for his car and wondered if he could afford both a car and an education.
Solid Investments
Most people have a misunderstanding about the cost of higher education and the levels of debt that graduates face. According to research conducted by the National Center for Education Statistics in its study on Postsecondary Student Aid, two-thirds of all students at four-year colleges have student loan debt (66.4 percent). The percentage is slightly lower at public institutions (62.4 percent).
The first thing this tells us is that a third or more of our graduates have no debt. Between the grants they receive from their colleges and universities and their family financial resources, they complete their undergraduate degree program debt free. The perception that every student incurs massive debt is simply not supported by the research and the data.
For those who do have student loans, the average level of debt upon graduation from a four-year institution is $22,125. For those attending public institutions, the average debt level is over $17,000. The levels of indebtedness are highest for students attending for-profit institutions.
Clearly, the cost of higher education is steep and a challenge for many families and students. Most colleges are sensitive to the economic pressures facing students and their families and are trying to do more with less. Recent data indicates that tuition increases for 2009-10 will be the smallest since the early 1970s. Many colleges and universities are also cutting programs and staff to make education as affordable as possible and to keep costs as manageable as possible.
But the most important questions remain: Is higher education a good investment? Is it worth taking on debt? The answer continues to be “yes.” While studies vary in their calculations, the value of a four-year degree is indisputable. The most prevalent finding — confirmed by the Census Bureau — shows that a four-year degree will result in an average of $1 million in additional earnings during a graduate’s lifetime. To graduate with a debt of $22,000 with a significantly increased earning potential is a great investment.
Studies also speak to the additional benefits of a college degree. The Institute for Higher Education Policy reports that college graduates save and invest more, have greater personal and professional mobility, provide an improved quality of life for their children, and have increased opportunities for leisure activity.
Studies also indicate that college graduates generate more tax revenue, increased workplace productivity, and decreased reliance on governmental programs and support.
The student I spoke with several weeks ago will be coming back to college in the fall. He decided that an investment in his education — an investment in his future — was more important than a new car. In challenging economic times, people must make decisions about priorities. There can be no higher priority than a college degree, and the investment definitely is worth it.
Jack P. Calareso is the president of Anna Maria College in Paxton. He can be reached at jcalareso@annamaria.edu.
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