Is going to college worth the cost of student loans? Today’s college students aren’t so sure, according to a new survey.
A report from Ascent Student Loans reveals that today’s college students are paying more than they expected for a higher education. Yet despite assuming more responsibility for education costs, many of these students are unsure whether college will pay off as an investment.
Most undergrads doubt college and student debt are worth it
More than half of students surveyed said they don’t believe the value of a college degree has kept pace with the rising costs of attendance.
These students’ doubts reflect a real trend: College costs have far outpaced the positive outcomes after graduation. Since the late 1980s, the price of a higher education has risen by 213%, according to our recent analysis of costs across generations. Comparatively, wages have risen by 67% since the 1970s.
But despite soaring costs, a bachelor’s degree can be worth pursuing. College graduates outearn high school graduates by $19,400 per year, according to our study of returns on investment for a bachelor’s degree.
But not all students might be aware of this fact. While most undergrads said colleges were clear about the costs of their education, they also said their school didn’t educate them about the outcomes and returns on investment they could expect after graduating, according to the Ascent Student Loans survey.
College students taking on more responsibility for college costs
College tuition inflation may be easing up, but students still feel as though they’re shouldering a heavy burden. Almost half of undergrads surveyed by Ascent Student Loans said they’re paying for more of their college costs than expected. More than 60 percent said they were covering more than half of their college costs on their own.
Unfortunately, students often have few resources to pay for college out of pocket. A part-time job or work-study program can help cover some college costs, as can grants and scholarships. When students exhaust these options, however, they may be inclined to take out loans to fill a funding gap.
Take graduates of the Class of 2017, for example. The average student debt amount was $39,400 — 6% higher than that for the Class of 2016.
Students: Do your research and make informed decisions
More than 55% of students in the Ascent Student Loans survey said they were the main person researching and making choices about their education loans. But despite being in charge of these important decisions, students overestimate their knowledge on the subject.
Most didn’t understand how student loan interest works or have a realistic idea of how much their student loan payments would be. Clearly, many of these students are making decisions without always having sufficient information.
“We need to once again take an investment approach, and arm students and their parents with information and guidance that will help them better align their level of investment with expected outcomes, such as graduation rates and expected earnings,” said Ken Ruggiero, chairman and CEO of Goal Structured Solutions, the administrator of Ascent Student Loans, in a statement about the survey.
Students should continue to inform themselves about education costs and student debt before enrolling, during school, and after graduation. Consider these tips.
Compare colleges and make affordability a top criterion. Choosing a low-cost college can save you tens of thousands of dollars over the course of earning a four-year degree. Consider other strategies to keep costs low, such as prioritizing public colleges or attending a community college and then transferring in your junior year.
Learn more about student loans. Calculate how much you’ll need in student loans. That way, you’ll avoid overborrowing and ensure this debt stays affordable. Read up on how interest works, the terms of your student debt, and how to calculate your student loan payments. You’ll need to know all of this and more to effectively manage student debt both now and after graduation.
Have a plan for your post-college career. It might be wise to research college majors and choose one that will lead to better employment opportunities and higher pay. And while it’s fine if your dream job doesn’t come with a big salary, you should at least project how much you’ll make after college to ensure that the debt you’ll face will be affordable.
Students can’t always control their college costs or outcomes, but they can do their part to become informed about their options and make wise choices. A student heading into college with this reality-based understanding of the potential costs and payoffs can confidently decide if college is worth it for them.
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|3.69% – 10.94%2||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|3.99% – 12.99%||Undergraduate and Graduate||Visit Discover|
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|4.04% – 12.01%1||Undergraduate, Graduate, and Parents||Visit Citizens|