Five Myths about Student Debt
When you see on the cover of the August 2016 issue of Consumer Reports the quote, “I KIND OF RUINED MY LIFE BY GOING TO COLLEGE,” you know the feasibility and practicality of financing a college education is on the minds of students and parents. Rightfully so. But before you reach the conclusion that going to college may not be worth your while, you may want to look at the data.
There are many myths about student loans that can do more harm than good. Myths that need to be dispelled to make sure students are not discouraged from pursuing degrees that will be paying off for them long after they’ve made their final loan payment.
The President’s Council of Economic Advisers recently published a report about the current state of student loan debt. The report consolidates a large amount of evidence and analysis to understand the $1.3 trillion in student debt that Americans has accumulated by 2015.
Let’s examine the misperceptions:
Myth #1: Growing student debt is eroding the value of going to college.
As discussed previously here, the returns on higher education are substantial and growing. Even when we consider rising students and the interest on student loans. The median bachelor’s degree holder will earn almost $1 million more over a career compared to a high school diploma holder. Also, higher education offers valuable protection against unemployment. See here.
Keep reading here.
Retired at UNC Wilmington
8 年Great coverage of the issue. A degree is a great investment for financial well being and life skills... a tremendous value. The downsides are: data that points to stagnant household income being part of the issue (ratio of debt to income). And not completing one's degree creates higher chance of default. We always have to do better to help the consumer student.
TOPIAN, The NEOM Food Co. Sales | Strategy | Market Development | Sustainability Execution | MBA IE Business School
8 年Great article. Personally I got a loan to pay my MBA program in the IE Business School, at the time Prof. Cabrera was IE's Dean. It was my best professional decision because the experience and the degree have changed my career very positively.