Millennials and those belonging to Generation Z are paying exorbitant prices for higher education, and the ROI is questionable. In the modern era, college after high school is something that parents, educators, and even peers stress throughout adolescence. The American Dream is a locked door, and a college diploma acts as the key to bringing this dream to life. While college costs appear to be rising every year, the quality of education does not seem to warrant these price hikes. With this said, as the economy begins to undergo drastic changes, one must consider if attending college and being crushed by student debt is the right path.
Weighing the Opportunity Costs
People who graduate from college are more likely to receive higher salaries over the course of a career. However, with the current state of the economy, they also run the risk of being underemployed for an extended period and become consumed by debt obligations. Students who are taking four or five years out of life to educate themselves are expecting to see returns in the short-term. If you choose to attend college, it would be wise to seek financial guidance and create an action plan. There are professionals such as Don Gayhardt who can guide teenagers or young adults online.
Conversely, some young adults are now choosing vocational schools or completely forgoing college altogether. Many people are becoming aware of the economy on the horizon and do not wish to be stuck with majors that will add little value to society. Vocational schools are becoming more popular again because specific skills provide returns faster without the accompanying debt. Getting into the workplace and gaining experience sooner is something to think about when considering the rising higher education costs.
Receiving Student Aid
There is currently a small percentage of American households that can pay for college out of pocket. For the rest of the population, student aid helps to cover the majority of collegiate expenses. Scholarships are also used to alleviate these expenditures, but only the highest performing students receive full-ride awards. The student loan bubble has continued to expand as college costs continue to rise and the coveted diploma’s value remains the same. When deciding on the type of aid you need, it is essential to understand the difference between subsidized and unsubsidized loans. Subsidized loans provide students with at least a bit of relief since interest costs are covered while attending college or if you defer your loan payments. On the other hand, unsubsidized loans begin accruing interest from the moment they are in your possession.
A new payment option has become quite popular overseas and has is only available at a few domestic institutions. Students now have the opportunity to pledge a portion of all income made after graduation for an extended period instead of taking out loans. Fortunately, if you run into a jobless stretch, the plan is paused until work resumes again. With rising educational costs, society is doing its best to provide a reasonable path toward graduation still.