Weighing Degrees and Debt
Earning the paycheck you deserve without breaking the bank
By Sarah FisherPublished March 1, 2011
The Low-down on Student Loans
While the traditional approach of a four-year university education often dominates the minds of high school students, it is also becoming an increasingly popular option for established professionals interested in creating a new career path. The concept of repaying loans and the amount of commitment involved, however, may seem far off. Repayment of student loans is crucial to the dynamic of recovering from the debt. After a student completes a four-year program, it can take 10 to 20 years to pay off loans.
Several options for repayment of federal loans are available, including standard repayment, graduated repayment, income-based repayment, full deferral, interest-only, and immediate repayment. Standard repayment involves paying a fixed amount on the loan’s principal and interest per month. Graduated repayment begins with a low monthly payment and increases as time goes on. Income-based repayment allows your monthly payment to be based on your current income. Full deferral, chosen by many current college students, does not require any payments to be made during four consecutive years of education, but payments begin six months after graduation. Interest-only repayment allows college students to pay off the accrued interest while they are in school, and begin paying the principal and interest 45 days after graduation. Lastly, immediate repayment of principal and interest after the loan has been fully distributed is also an option.
Whether a high school graduate beginning college or someone going back to school later in life, to start a new career, the type of loan and repayment one chooses weighs heavily on the value of their education. Students are banking on this expensive education to land them a job that will pay off their loans, but is a decade of debt worthwhile? How important is that four-year degree in the job market today?
Trade or Traditional
We’ve all been told that the four-year university track isn’t for everyone, but students coming out of high school and people in the job market are constantly pressured to have a degree. National annual enrollment into a postsecondary program has increased significantly over the last ten years, from 14.5 million in 1998 to 19.1 million in 2008. Many job qualifications require a four-year degree, while the specific area of study sometimes isn’t all that important.
Experience is the kicker now. The amount of people walking around with a B.A. or a B.S. is increasing and has been for years, leaving the pool of educated candidates entirely too large. So how can a job applicant stand out from the rest? Experience. But, how do you get experience? With a four-year degree. The dilemma is cyclical.
Learning a technical trade, on the other hand, has become underrated. In theory, a person with any grade point average or major can become a good salesperson, but that same person can’t be an electrician or a heating and air conditioning specialist. These types of practical skills provide more options in the job market. During the current recession, the number of students enrolled in technical trade programs has increased from about 365,000 to 1.8 million.
Being a professional master of a service that is a necessity to consumers is a great advantage in today’s economy. Everyone needs proper wiring in their home and a working furnace in the winter. Jobs in trades like these have a certain amount of security that a corporate position may not offer. On the other hand, these trade professions have historically carried a less-than-glamorous image. But glamour doesn’t always pay the bills, especially recently.
From a financial standpoint, a shorter degree program that allows you to get out into the workforce quicker could be essential to your future. Even for a person searching for a new career after losing a job, a technical profession is often overlooked as an option.
As many highly qualified individuals in the United States are living without jobs right now, the option of going back to school for an additional degree, or staying in school to wait out the recession, has become more attractive. For fresh college graduates without a job offer, applying to a master’s program has become a common trend. These students, left to seek a second degree and incur more debt, are being slapped with the reality that possessing a bachelor’s degree in the current job market is equivalent to possessing a high school diploma 20 years ago. Today’s employers often expect a higher level of specialized qualification.
The catch, however, is that the increased number of highly qualified candidates are making these programs harder to get into. Similarly, real-world experience has become a competitive advantage in gaining admission into an MBA or other master’s program.
The risk of taking out loans without a guarantee of landing a higher paying job to repay them is a gamble that some people have become willing to take.
Many highly experienced professionals are joining recent college grads in the pool of eager people looking to make a living in today’s economy. More than ever, the true value and return of secondary degrees has come into question. While law and medical degrees typically pay off in the long run, some master’s programs may not be as profitable. Master’s degrees in business and engineering often lead to a higher income, making the investment worthwhile, but graduates of master’s programs in the liberal arts and humanities are finding it harder to secure employment that pays commensurately for their hard-earned knowledge.
Taking the Leap
Choosing the right institution to pursue a higher education is important not only in determining your future career path, but also in maintaining your sanity while going to school. Many factors will impact your quality of life while taking classes. Take some time to research prospective schools before applying. For students with families or part time jobs, flexible class schedules, school location and availability of childcare can make all the difference in ensuring that your education experience results in confidence in your newly acquired skills and not a nervous breakdown in a pile of textbooks.
The following central Ohio institutions offer a variety of options, from trade programs to MBAs, to help you reach your goals in a manner that suits your lifestyle.
MBA and Business Programs
Ohio Business College
1880 E Dublin-Granville Rd.
100 W Home St., Westerville
201 S Grant Ave. (614) 797-4700
303 E Broad St.
Ohio State University
Fisher College of Business
2100 Neil Ave.
2745 Winchester Pike
University of Phoenix
8415 Pulsar Pl.
4140 Executive Pkwy., Westerville
5665 Forest Hills Blvd. (614) 212-2800
2469 Stelzer Rd.
825 Tech Center Dr., Gahanna (614) 322-3414
3880 Jackpot Rd., Grove City (614) 539-8800
Miami-Jacobs Career College
150 E Gay St. (888) 859-1113
Columbus City Schools Adult & Community Education
2323 Lexington Ave. (614) 365-6000
4151 Executive Pkwy., Westerville
Vet Tech Institute of Bradford School
2469 Stelzer Rd.
American Institute of Alternative Medicine
6685 Doubletree Ave.
Mount Carmel College of Nursing
127 S Davis Ave. (614) 234-5800
Chamberlain College of Nursing
1350 Alum Creek Dr.
Design and Technology Programs
American School of Technology
4599 Morse Centre Rd.
3781 Park Mill Run Dr., Hilliard
Columbus College of Art & Design
60 Cleveland Ave.