According to a study by the Federal Reserve Bank of St., Louis, United States college students have collectively generated 1.6 trillion dollars in debt as of a 2020 study.
This study highlights the struggle of nearly 44 million students that all bought into the idea that drowning yourself in student loans was a normal phenomenon that would eventually resolve itself once they get the job of their dreams. However, as the pandemic grips the nation, with unemployment reaching nearly 15% at one point this year, many students are waking up to just how deep of a hole they’ve dug for themselves.
“How did this happen?” you might ask with the answer to that being: college tuition has grown exponentially. You may still hear your parents or grandparents reminisce about having a part-time job that paid for school, some having benefited from GI Bills. While it is nearly impossible for any part-time job to so much as put a dent in tuition bills these days, it is not uncommon for many to still sign with the Armed Forces just for the sake of taking advantage of all the tuition programs. Being a soldier is an honorable pursuit, though it can also be a drastic measure when taking into account the 4 to 5 years of your life that you’ll dedicate. However, there are other viable options.
Similar to the armed forces in that you will have to sign years of your life away to a cause, the Peace Corps offers a slightly less intense alternative. While you will be volunteering in a foreign country and able to have some say in what position you fulfill, a Peace Corps volunteer is required to serve only two years and in much safer non-combative conditions. The Peace Corps has a great employment aid department that matches people with jobs similar to their volunteer positions and even networking opportunities upon their release. What truly sweetens the deal are the public and private loan cancellation and deferment programs that can either buy you time or eliminate up to 70% of debt on some federal, private, and public loans. More details can be found here.
The next move you can make without joining an organization is simply getting a two-year degree at a local community college. The American Association of Community Colleges reports the average yearly cost for their students is $3,500, which is nearly 3x less than a low-level college’s 4-year degree — “low-level” not being used to disparage as we will see soon. The credits from your community college will easily transfer to a local public college that will let you take advantage of in-state tuition. While you may not feel like bragging about what college you go to and may moan over how you missed out on getting living on your own away, you will quickly forget this fact when you are the only one of your friends able to afford a trip abroad after graduation. This strategy will keep your debt down to a minimum.
The only scenario in which it would not be unwise to go to a Big Name and even Bigger Tuition Private School is if you come from an affluent family, were able to secure a full-ride scholarship, or you know you will be majoring in a field with a high Return on Interest. The first two conditions speak for themselves; the last means you have a passion for a STEM subject like engineering, physics, computer science, or finance, which all traditionally offer students high paying jobs upon graduation. While a liberal arts degree can prove fruitful in terms of fostering new tastes and expanding one’s mind, they will have no immediate ROI unless paired with an even more expensive graduate degree or Ph.D. Only STEM majors can truly afford debt short term.