My college/student loan rant Image
by Sequoia | Jun 02.2012

Credit: Makc via Shutterstock/Salon

Let me first say, that as a college professor, MBA and BA degree holder, I definitely believe in education. I think learning should be a life-long process and congratulate people who are able to successfully pursue and complete their goal of graduating.

As someone who was told a couple of weeks ago that my student loan bill will be $500/month, I think the debt we get into as a result of our desire to “not have to work at McDonald’s” is a bit insane. We’ve all heard the speech…..if you want to have a good life and make a lot of money, you’d better go to college….otherwise you’ll end up flipping burgers. And given that our generation grew up with parents who told us that we can be anything we want to be (and that that “anything” shouldn’t include ‘fast food worker’) we set our sights on professions that would pay well and make our parents proud.

“Back in my day” it didn’t really matter what you got your degree in…it just mattered that you had a degree. My BA degree in psychology got me a career in Human Resources. I knew nary a thing about HR, but that pretty piece of parchment got me in the door. I lost that job and less than a month later I was at a desk at another company doing more of the stuff I knew nothing about. A year later, I applied for a position in marketing within my company, and boom, new career path. Nowdays, just a few years later, college graduates aren’t so lucky. We’re in the age of what I like to call the “subject matter experts.” It’s not enough to have a degree anymore. Hiring managers want you to have specialized skill in whatever job you’re applying for. I recently applied a Social Media job for which they wanted the candidate to have 8-10 years of social media experience….You would have had to have been on the first wave of early adoption because social media has barely been around that long….and social media as we know it….well, that’s a different story for a different post.

Courtesy of politicalhumor.about.com

I decided to get a MBA so I could get “even further ahead,” make more money and (mostly) so that my mom could say “my daughter has her MBA.” A few years later I’m not really sure it was the best decision for me to make. On the one hand, I make more than most of my friends….and it is just a little bit easier for me to find a job and/or be picky about the jobs I take. On the other hand, I’m now $60+ THOUSAND in debt….and let’s not even get into what that will be after interest. After a conversation with a friend a couple of days ago I learned that while my debt seems massive to me, it’s still (sadly) on the lower end of the college-debt cycle. And here’s the thing….had I not gone to school (or waited), gone directly into the workforce and saved up, I might arguably even be better off than I am now or doing just as well. Let’s think about this for a minute.

You spend 4 years (roughly) in college. That’s four years that you’re likely not in the workforce….and even if you are, you’re likely only able to work something that pays enough to allow you to afford to eat, have a place to live and MAYBE pay for your car. That said, you’re not really saving or investing in yourself. Someone not in college may make less, but they’re making 100% more than you if you’re not even working. Even if they only make $25,000/yr, that’s $25,000 more per year for four years than you made PLUS they’ve gained invaluable work experience in the process. At the end of four years they’ve earned $100,000 (before taxes) while you owe nearly that much in student loans….and have nothing but a pretty piece of paper to show for it.

Let’s just say I had $500 to pay in student loan bills per month….that’s $6,000/yr that I’m paying back into student loans for AT LEAST 10 years. Even if having a degree will allow me to make more than someone without it, we have to remember to carve that little chunk out and it’s really not as big of a sell as it once seemed. That said, if a degree allows me to earn, let’s just say, $10,000 more than someone without one, it’s really just $4,000…..and when you factor in tax brackets….we might just be around the same place when it comes to what we’re bringing home. That’s barring any serious differences in our lives, such as children, illnesses, etc. Please note that I didn’t use accurate figures here. I just used numbers that are easy to calculate for the facility of my argument.

I could go on and on, but I’m sure you see where I’m going with this. The bottom line is that something needs to be done. Our young people (myself included) are starting their lives out buried in seas of student loan debt. I can’t even imagine what things will look like when we get to retirement age. Lord knows we can’t put away as much as we’d like now because it costs so much just to survive day to day….and that’s even before you get married and/or start a family and have to incur the additional expenses associated with it.

Courtesy of startingyourownbusinessovernight.com

I was thinking of ways I could quickly alleviate some of the pressure I feel from my student loans, and aside from having a rich benefactor pay them off  (which I’m still looking for. I accept Paypal!), I thought about how interesting it’d be if rather than (or in addition to) companies paying for employees to get further education, they’d help them repay their student loans. What if we could get our government representatives to think about passing a tax break for companies that, as a part of their benefits package, subsidize their employee’s student loan bill? Please understand that this is just a start….it is by no means a solution to the larger issue at hand. I think, however, it takes people thinking through the issues and actively trying to come up with solutions that will make the grave state we’re in more manageable.

What ideas do you have that you think would make our current plight a little more bearable? I’d love to hear them. Please leave them and any other comments you have for me below! 🙂

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Sequoia

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