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The Average Cost of a College Degree
According to Student Debt Relief, in 2018, the average cost of one year of college varied from $9,970 for an in-state public university to $25,620 for out-of-state students. However, a four-year private college could set you back $34,740 per year, on average.
The cost of tuition, of course, is not fixed. You can expect the yearly prices to increase by 2.4 to 3.2 percent on average annually.
Unfortunately, this is not the extent of the costs involved in earning a college degree. You will also need to account for room and board, which increases the average cost significantly.
According to College Board data, in-state students at four-year schools often pay more for their room and board than tuition. The average cost of living per year is about $10,800.
Out of state students will pay a similar amount. But, private four-year college students can expect to pay a little more at an average of $12,210 per year.
Considering this data, the average cost of going to a four-year college stacks up to be about $20,770 per year for in-state students at public colleges. It costs $36,420 per year for out-of-state students at public colleges. Students at private universities can expect to pay $46,950 per year.
How Much Can You Expect to Earn?
Those prices represent some serious debt to take on before even beginning your career.
The US Census Bureau reports that the median annual personal income in the United States is just $33,493. So, you could, realistically, be taking on more debt per year than your salary will cover for many years.
While the incomes of graduates vary wildly, CNBC reports that the average income for the first five years of a degree holder’s career is just $48,400.
The Bureau of Labor Statistics suggests that the average income of those people with only a high school diploma amounts to $34,735 per year.
If you check out the details of more specific professions, though, the potential earnings are quite a bit different. Entry-level Freelancers in the US, for example, earn about $41,444 annually, according to Indeed.
According to GlassDoor, the average blogger brings in about $32,802 per year. The average dropshipper earns about $37,674 per year. And, the average freelance graphic designer earns about $59,021 each year.
Consider your potential career field carefully and investigate the realistic numbers before you commit to taking on the debt that comes with education.
The Impact of Student Loan Debt
Even if you’re prepared for the cost of a college degree, you may not be aware of the more far-reaching effects of college debt on your financial future.
Student loan debt can significantly impact your ability to buy a home. Even if you can afford a monthly mortgage payment, meeting your student loan payments could prevent you from saving the down payment on a home.
If your student loan payments do compromise your income, you may even struggle to pay rent. You could be stuck living with your parents for a lot longer than you expected.
According to May 2019 Zillow data, approximately 14 million adults aged 23 to 37 are still living at home with one or both parents. So, if you’re keen to fly the nest, you may struggle being tied to student loan debt.
What Makes a College Education Still Worth the Investment?
With all these facts and figures, you may wonder, “is it worth it go to college?” While a college degree may be costly, there are still indicators that a formal education may be worth the investment.
Bureau of Labor Statistics data suggests that there is a record high pay gap between those possessing a high school diploma versus those with a four-year degree.
Not going to college could add up to about $1 million in lost wage potential over your lifetime. Additionally, a college education is likely to affect your ability to be employed in the first place.
There is a 5.6 percent unemployment rate among degree holders compared to 17.9 percent among those with a high school diploma.
Of course, your choice of degree can have a massive impact on your earning potential. Some degrees offer higher returns than others. The top-paying majors include health, business, and STEM (science, technology, engineering, and math) disciplines.
At the other end of the scale, the lowest median earnings are associated with majors in arts, social work, and education. But, income shouldn’t be your only consideration. It is important to choose a field that you would enjoy and in which you could excel.
When the Answer to “Should I Go to College?” is “No”
If you’re already wondering “how necessary is a college education?” then a college program needs to be carefully considered. Signs it might not be right for you include:
1. You Don’t Know What You Want to Do
If you don’t have an idea of where your career path should take you, you risk switching between degree programs. This could rack up excessive student loan debt. It may be a better idea to opt for a gap year and explore your options.
2. You’re Just Following the Pack
When all your friends are planning for college and your family expects you to go, it can seem easier just to follow the pack.
According to The Hechinger Report, almost one-third of students go to college because they feel they are supposed to after finishing high school.
Instead, consider community college, where you can earn credits for a lot less money. There are other non-education options that you can explore, too, before you jump into a degree program.
3. You’re Not Sure About Four More Years of School
If you struggled with the academics of high school, four years of college might not be the right option for you.
However, skilled trades are in high demand and can pay very well, so you could be better suited to vocational training.
What to Do Instead of Going to College?
Fortunately, there are lots of alternatives if you decide that a university degree is not necessary for success in your career. These include:
1. Starting a Business
With over 27 million small business owners here in the U.S, you’ll be in good company. The internet has allowed fostered a catalog of new business models.
If you’re thinking about starting your own business, online learning platforms like Coursera have affordable classes on topics like management, business finances, and supply chain management.
2. Technical College
Technical colleges don’t require classes that are unrelated to your career focus. There is a growing demand for skilled trade workers as the disproportionately older worker population is starting to retire.
3. An Apprenticeship
Vocational training is an excellent way to get into a professional field without dropping thousands on a university education, but if you’re interested in a unique field, you might struggle to find a program that fits.
For rarer fields of study, especially artistic professions, consider approaching successful professionals and discussing a potential apprenticeship.
4. Community College
Community college can be a more flexible way to learn if you’re not sure about a four-year program.
You can even transfer the credits from your associate degree to a four-year program if you decide you want to continue your education.
5. The Military
Military service offers a competitive salary, and once you complete your contract, you will be eligible to take advantage of the GI bill to cover part of your tuition at a four-year university.
The “Consequences” of the Alternative Route
We know that the unemployment rates for college graduates are lower, and the earning potential is higher, so there are some potential consequences of completing a college degree program.
Claiming a degree on your resume is considered standard for many career paths, and if you opt for an alternative route, you will need to work a little harder to convince potential employers that you’re the right candidate for the job.
However, there are lots of highly successful people that never completed a four-year degree.
Many of these individuals are entrepreneurs, establishing successful businesses without the benefit of a college education.
Opting Out of College Does Not Mean Opting Out of Education
If you like the idea of establishing your own business, you may still need to take courses and study to develop your skillset.
While you can hire bookkeepers and other experts, to grow your business you will need to have an overall understanding of how your business finances will work. However, you don’t necessarily need a business degree or an MBA to operate a successful small business.
Alternative business models are growing in popularity all over the world. Blogging, e-commerce businesses, dropshipping brands, and info-products are all viable businesses, and none of them require a formal education.
Check out this article for everything you need to know about starting and managing a blog.
So, Should I Go to College?
Deciding whether you should go to college will probably be one of the most challenging and decisions of your life. Formal university degrees are time-consuming and expensive, and it’s important to remember that college is not for everyone.
Statistics do show that people with a college degree will have higher average earnings, but there are a growing number of well-paying careers that don’t require any kind of degree.
There are pros and cons associated with going to college that you will need to explore for yourself. It is important to bear in mind that this decision can impact your career options and your financial future.
Although you may have friends or family members trying to influence you, you need to remember that, ultimately, this is your decision. While a degree could improve your chances of landing a job that pays well, it can leave you with significant student loan debt.
Everyone is different, and it is crucial to remember that college is not the determining factor for success. You are.
Speak to your family, friends, and college advisors, but don’t overlook the benefits of listening to your instincts.