In the next few months, hundreds of thousands of high school seniors will be deciding where to go to college. They’ve read the viewbooks, checked out the campus, and made sure they could major in a chosen subject. And, they’ve considered whether they will receive sufficient financial aid to attend.
What prospective students rarely do, however, is question whether a degree from a particular college is likely to lead to a lucrative job after graduation. How many prospective applicants press the careers office for information on employment or salaries? How many ask what it will take for them to be employed at graduation?
For the student applying for significant loans, the challenge of finding a well-paying job should be a cause for serious worry. The Department of Education estimates that in 2009, only 56% of students at private non-profit colleges were in repayment of their student loans four years after they graduated or left school. That figure dips to 54% for students at public non-profit institutions and plummets to 36% for students at for-profit colleges.
The reality of graduates struggling with debt is in sharp contrast to their expectations as students. According to the latest national survey by the Higher Education Research Institute at the University of California at Los Angeles, 72.7% of 2011 freshmen largely agreed that the chief benefit of college is increased earning power.
Sadly, the Department of Education data suggests that many entry-level graduate salaries, for those lucky enough to find a job, are insufficient to maintain an adequate standard of living while repaying debts. The unemployment rate in January, 2011, for those with bachelors degrees aged 20-24, stood at 10.8%. Graduates in this cohort who do have jobs may be either working part-time or underemployed, further exacerbating their financial situation.
Students who are considering taking on high amounts of debt must understand what that debt will mean for their lives after graduation. Colleges and universities have a clear responsibility to not only publish the career and salary outcomes for their graduates, but also to identify the time and effort required for a successful career search.
Perhaps it is time to put a warning label on every college loan that says: “This college loan may adversely affect your financial health. A college degree does not guarantee that you will receive a post-graduate job with a salary sufficient to repay your loans. Further, your debts cannot be discharged through bankruptcy.”
Increasing the number of Americans with a college education, and making loans available to more students are worthy goals. But, when students are able to take out loans with insufficient consideration of the consequences, it bodes well for no one–least of all, the debt-ridden college graduate.