We’re living in an age where the majority of entry-level positions require a bachelor’s degree, and the thought of working at McDonald’s for the rest of their life is enough to scare most young people into assuming that a college education is 100% necessary to survive. Some people even grow up in families where heading off to college after high school is simply assumed and expected, a right more than a privilege.
Over the years, the cost of college has risen faster than consumer prices and the median family income. Statistics show that the price of a college education has increased 1000% since 1978; comparably, home prices have increased about 300% in the same timeframe. The housing market recently crumbled drastically in this country, and financial analysts are wondering if the same will happen with the market for a college education.
The actual cost of a college education can vary considerably—anywhere from under $10,000 per year at a public university for in-state students to over $50,000 per year at a private school—and the prices are always going up, but as the old saying goes, “Where there’s a will, there’s a way.” Most students that want to continue their education are attending college whether or not they can afford it, thanks to student loans.
In 2007, USA Today reported that during the 2006-07 academic year, the amount of federal student aid – money that does not have to be repaid—declined, causing more students to borrow money in order to attend school. At that time, nearly two thirds of college students graduate in debt. In 1993, only half of students had finished their degree with student loans.
Things have only gotten worse since 2007, and college costs continue to rise at a rate faster than inflation, causing analysts to wonder if—just like the like the housing market—the “bubble” of college education as we currently know it will pop.
It’s easy for college students attending pricy private universities to reach the maximum amount the government will allow them to borrow rather quickly, and the availability of private student loans is drying up. Parents aren’t always able to help out with this problem by acting as co-signers, either, thanks to poor credit scores and the simple fact that banks aren’t lending as much as they did a few years ago.
Some students are simply turning to credit cards in order to fund portions of their tuition not covered by financial aid. In May 2009, MSNBC reported that Sallie Mae found college students are graduating with 41 percent more credit card debt than they were four years ago. Even worse, 82 percent admit to carrying balances each month. Recent data also shows that 7 percent of students who began repaying loans during 2006-2007 had defaulted by September 2008—the highest default rate in 10 years.
A survey by the National Association of Colleges and Employers found that only 20 percent of 2009 graduates that applied for jobs were hired, compared to a success rate of 51 percent in 2007. This is causing most students to realize that a degree is no longer the golden ticket or job guarantee that it once was. According to the Denver Business Journal, fewer people now see college as a good investment. Of the 500 people surveyed by Country Financial, only 67 percent saw college as a good investment, down 22 percent from one year ago.
Even though things aren’t looking as bright as they were a few years ago, plenty of people still want to attend college. The Washington Post reports that more and more students are opting for two-year community college programs than ever before and the College Board reports that the average two-year public college charges $2500 per year in tuition and fees, considerably less than tuition at a four-year school.
One recent college graduate, Orange County, California resident Hernan Castillo, is trying to survive under the weight of $5,200 in credit card debt and $30,000 in student loans. He told an MSNBC reporter that he’s making payments on time but sees little hope for getting out of the warehouse job he holds and landing a job as an accountant, the field in which he earned his degree.
The most disturbing thing that he said during the interview? “Every day I wish I had never gone to college. It has been the biggest mistake of my life. Sometimes I wish I had gone to prison instead of college. At least I would have learned a trade or two and started being independent once I got out.”
As the cost of a college education rises, your ultimate goal should be to find a school that you can honestly afford. If you’re going to take out student loans, you need to realize that you will have to repay the money that you borrowed.
Melissa Rhone earned her Bachelor of Music in Education from the University of Tampa. She resides in the Tampa Bay area and enjoys writing about college, pop culture, and epilepsy awareness.
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