How smart investments enhance return on education
Indebted
Saturday, June 8, 2024 was momentous: it was the day I paid off my student loan. My undergraduate student loan.
Twenty-three years and one month after earning my BA at Penn, I settled my debt.
Penn changed my life. I wouldn’t trade that education for anything, and I am nothing but grateful for the opportunity conferred by those loans. But it is sobering to realize I spent over half my life paying them.
Made of money?
When I attended Penn, annual tuition was around $25,000.
In 2022, median household income in the United States was $74,000 (Census data)
— a 2.2% decline. According to Forbes, the average salary nationwide is $59,500.
So, real income is declining while the cost of education — the time-honored means of acquiring skills and connections required for well-paid employment — is rising.
For many , loans are a bridge across that gap between where one comes from
and where one hopes to go, financially.
But the chasm that must be crossed is expanding, and building that ‘bridge’ takes an increasing (and rather terrifying) amount of money.
Long-term solutions to staggering student debt involve shifting cultural priorities and a commitment to social justice.
Until systemic change becomes reality, though, young people and their families need to strategize how to get the most out of the huge investment that is education.
Go to college when you’re ready*
*not when you graduate from high school
There is so much pressure on students in the United States to go straight from secondary to tertiary education that other options may hardly be considered.
In 2022, 62% of high school graduates went straight into two or four-year degree programs (down from 69% in 2018).
Taking a year or two off to work, explore career options, take short courses, etc.
might not generate cash, but it’s a huge savings compared to paying (or borrowing)
tens of thousands of dollars over those years.
Apart from convention, and social pressure, there is no reason to go to college at 18. The brain doesn’t settle into its mature state until a person’s mid-to-late 20s. Wouldn’t it make sense to take advantage of that maturity to extract value from education?
Know what you want
The concomitant risk of rushing into college is that young people haven’t had time to consider what they really, really want.
When a student has a clear picture of what they want their adult life to be — including work, living environment, relationships, family life, leisure, etc. — they are in a better position to assess their strengths, interests and educational options and map a logical path towards their goals.
Case in point — I went to university at 17, planning to become a medical doctor. Nothing about medicine fits me, but I was far too young and dazzled by other people’s notions of ‘good’ jobs to see that. By 19, midway through my second year, I’d developed enough self-awareness to recognize the error of my way, and change.
According to 2017 National Center for Education Statistics data, 33% of undergraduates change majors at least once in the first three years of college; 10% change twice or more.
Waiting till 19 to start university would have allowed me to devote my whole course of study to writing and literature, instead of spending all of my first and half of my second years banging my head against the brick walls of various sciences.
Learn what they don’t teach
There are certain skills which, if mastered, will enhance every area of study or work.
Writing
Public speaking
Cultivating creativity
Self-advocacy & self-care
Negotiation and conflict resolution
Managing personal finances
Developing a physical wellness routine
To get the most out of their education, students need to be physically and mentally well; they need to be strong communicators, able to negotiate relationships, and competent to manage their time.
Instead, many high school seniors I interact with are stressed, struggling to fulfil half-grasped expectations, fixated on external validation… is it any wonder a lot of teens get to college and flame out, party too hard or fail to thrive?
Young people should be supported to acquire these ‘extracurricular’ skills by whatever means are available: workshops, online courses, clubs, activities, mentorships.
Being confident and grounded in these life-skills will enable them to step into any classroom, dorm or discussion, and extract value from the situation.
***
Student loan interest rates are at a decade-high right now. The average student spends 20 years paying back their student loan; some spend over 40 years.
In light of that, it makes sense to do everything possible to ensure those years of debt are worth every penny.