A college education can change the course of your life. This investment in your future has the power to open doors of opportunity to professional and personal fulfillment.
But, for most students, those opportunities come with a cost: the burden of student debt.
Yes, the cost of tuition is rising and with it debt loads. But college enrollment is growing, too, and so is the income gap between those who have degrees and those who do not.
Numbers tell this story.
Tuition costs soar
Tuitions are rising like a lost balloon on a summer day. A four-year public university now costs on average $8,000 per year, excluding room and board. That number jumps to $28,000 per year for students attending four-year private institutions.
Debt-free students unusual
Sixty-six percent of 2011 graduates began their post-school life with student-loan debt, with the average loan amount totaling more than $26,000. By comparison, in 1993, less than half of all students graduated with debt, and that debt averaged $14,500.
Right now, combined student-loan debt stacks up to $914 billion in the United States, according to the Federal Reserve Bank of New York. Unlike other debts, student loans cannot be discharged in a bankruptcy.
Millions attend college
More than 18 million people are attending college, and 10.6 million of them are enrolled at four-year schools. However, 40 percent of students at four-year schools will not earn a degree within six years. Whether a student graduates in four years, six years or not at all, student loans must be repaid.
College is a smart move
Despite the debt, a college degree can be a wise financial investment. High school graduates can expect to earn about $1.4 million in their lifetimes. Add a bachelor’s degree, and lifetime earnings rise to $2.4 million.
Want to earn more? Obtain a professional degree and lifetime income soars to more than $4 million. Medicine, law, pharmacy and public accounting are each professions of this kind that offer a strong earning potential.
A new frontier
Higher education is evolving – and not all of it is getting more expensive. Free MOOCs, or massive open online classes, aim to deliver an Ivy League-quality education to anyone with access to a computer and the Internet.
In the last year, several start-ups have begun offering more than 200 free, online college classes. Companies such as Udacity, Coursera and edX promise to reinvent how we educate ourselves and meet the demands of the modern workplace and economy.
Here’s what Coursera says about itself:
We are a social entrepreneurship company that partners with the top universities in the world to offer courses online for anyone to take, for free.
We envision a future where the top universities are educating not only thousands of students, but millions.
A college degree is an investment that can pay off like any other – provided you plan, budget, make adjustments when necessary and follow through.
Durango resident and personal finance coach Matt Kelly owns Momentum: Personal Finance. www.PersonalFinanceCoaching.com.