There has been a lot of talk in the news about the plight of college graduates saddled with debt concluding that a college education doesn't pay. In this article, lets take a look at whether education pays.
According to the Department of Education, the average student graduates with approximately $24,000 in student loans. The projected interest rates for student loans may top 6% in 2012-2013 year, so lets use 6% as an estimate.
At 6% interest, I am going to have a payment on a 10 year repayment plan (assuming I am average) of $266.45 monthly. That's a lot of eating out I will have to bypass to make my payments! Let's see for $266 I could have a car payment, buy some awesome new clothes AND have a great phone plan with all the data I can stand!
But here's the thing.... According to the Census Bureau, the difference in my average salary will likely be 65% more after graduating with a 4 year degree compared with a High School diploma (20% higher for an Associates degree). That means that even though I am paying $266.45 in student loan payments I can earn $4,563 per month. That is almost $1,800 more than I would have earned without the degree.
CAUTION: Averages are just that. There are a lot of factors that come into play as you consider how much you can earn. Some are factors you can control like your professional appearance, your work habits, your prior experience, the type of work you have chosen. (Some service professions are grossly underpaid compared with their corporate counterparts). There are other factors you can't control like the unemployment rates, the location of the employer etc. Your best bet is to focus on the controllable factors and set yourself apart as the primo candidate the employer would love to hire.
But overall, does education pay? You bet!