So I was pondering this question, and thinking about my children, and this swirling question about students accumulating debt, then graduating to a future that is either unemployment or under employment. (Under employment is by now familiar meme of a Starbucks Barista with an undergrad degree who cannot find work in their chosen field)
With that in mind I asked myself what decision would I have made.
- I'll start off by explaining that my folks completely paid for the first four years of my education, and then by further explaining that I was a complete fuck off for those four years and several others....ultimately it was 12 years before I got an undergrad degree. But those were 12 very fun years...I really regret none of that.....I actually was in school for a lot of that time, I'm not sure how long I would have gone on that way, but ultimately I met my wife, and she (gently) guided me back onto the path. During this time I waited tables, and received both grants and student loans, ultimately graduating to immediate full time employment with about $24K in debt against a salary of about $40K.
- The second point I'd make is that in the end I picked a major (Supply Chain Management) based simply on my counselors opinion of the major that would get me out the fastest given the course work I had already completed, with the highest probability of getting an immediate job given the school's reputation in the field. I did not make this choice until about 12 months prior to graduation or about 11 years after leaving home. It all worked out, career advancement was rapid, again I have no regrets.
Ok...enough about me, here are some interesting facts about the current generation of college grads:
- Overall they have a labor force participation rate of 72% compared to 54% for folks with only a high school degree
- Overall they have an unemployment rate of 3.7% compared to 7.5% for folks with only a high school degree
Among households holding any student loan debt monthly payments are typically less than 7% of income. Bear in mind this also includes folks with student loan debt that graduated some years back. That being said the 25th percentile pays about 2% of their income, the median pays about 4% of their income and the 75th percentile pays 7% of income. Actual payment dollars are $90, $160, and $300
Lifetime income for folks with undergrad degrees is about $2.27M vs $1.3M for folks with a high school diploma
Some undergrad degrees pay more than others typically STEM degrees
- Engineering median income $75K
- Petroleum Engineering median income $120K
Some undergrad degrees pay less than others
- Social work median income $29K
- Teaching median income $45K
I conclude based on this data that if an individual is seeking a degree in a STEM field college is well worth the investment.
There may be majors where this is not true depending on what the cost per credit hour are and the associated median income, one could likely make an equation that would tell you the predicted return on your investment pretty easily. You would have to slightly modify your expected results if you are not a white male, particularly your odds of getting a job if you are black, or your median income expectations if you are female.
Back to my original reason for doing this, the boys.
- Oldest (16)....classic engineer, already super advanced in math...easy choice for him
- Middle (14)....bright enough in math and science, I'd guess he'd end up like me though, a business major of some sort
- Youngest(10)....not the best student, average academically, but super charming and by far the most handsome....I'd guess he will be the biggest risk in this regard, so I'm coaching my wife that he might want to do something different...he enjoys cooking, maybe he could be a chef?
I've mentioned in previous posts that I've been fighting cancer for years, and unfortunately it looks like that battle is drawing to a close. Fortunately for these guys my father is still alive, and he will fund the first four years of their educations. (He didn't learn very well from me did he?)
With that in mind I asked myself what decision would I have made.
- I'll start off by explaining that my folks completely paid for the first four years of my education, and then by further explaining that I was a complete fuck off for those four years and several others....ultimately it was 12 years before I got an undergrad degree. But those were 12 very fun years...I really regret none of that.....I actually was in school for a lot of that time, I'm not sure how long I would have gone on that way, but ultimately I met my wife, and she (gently) guided me back onto the path. During this time I waited tables, and received both grants and student loans, ultimately graduating to immediate full time employment with about $24K in debt against a salary of about $40K.
- The second point I'd make is that in the end I picked a major (Supply Chain Management) based simply on my counselors opinion of the major that would get me out the fastest given the course work I had already completed, with the highest probability of getting an immediate job given the school's reputation in the field. I did not make this choice until about 12 months prior to graduation or about 11 years after leaving home. It all worked out, career advancement was rapid, again I have no regrets.
Ok...enough about me, here are some interesting facts about the current generation of college grads:
- Overall they have a labor force participation rate of 72% compared to 54% for folks with only a high school degree
- Overall they have an unemployment rate of 3.7% compared to 7.5% for folks with only a high school degree
Among households holding any student loan debt monthly payments are typically less than 7% of income. Bear in mind this also includes folks with student loan debt that graduated some years back. That being said the 25th percentile pays about 2% of their income, the median pays about 4% of their income and the 75th percentile pays 7% of income. Actual payment dollars are $90, $160, and $300
Lifetime income for folks with undergrad degrees is about $2.27M vs $1.3M for folks with a high school diploma
Some undergrad degrees pay more than others typically STEM degrees
- Engineering median income $75K
- Petroleum Engineering median income $120K
Some undergrad degrees pay less than others
- Social work median income $29K
- Teaching median income $45K
I conclude based on this data that if an individual is seeking a degree in a STEM field college is well worth the investment.
There may be majors where this is not true depending on what the cost per credit hour are and the associated median income, one could likely make an equation that would tell you the predicted return on your investment pretty easily. You would have to slightly modify your expected results if you are not a white male, particularly your odds of getting a job if you are black, or your median income expectations if you are female.
Back to my original reason for doing this, the boys.
- Oldest (16)....classic engineer, already super advanced in math...easy choice for him
- Middle (14)....bright enough in math and science, I'd guess he'd end up like me though, a business major of some sort
- Youngest(10)....not the best student, average academically, but super charming and by far the most handsome....I'd guess he will be the biggest risk in this regard, so I'm coaching my wife that he might want to do something different...he enjoys cooking, maybe he could be a chef?
I've mentioned in previous posts that I've been fighting cancer for years, and unfortunately it looks like that battle is drawing to a close. Fortunately for these guys my father is still alive, and he will fund the first four years of their educations. (He didn't learn very well from me did he?)