Student tuition debt is over $1,300,000,000,000. Student loan debt has exploded since 1990. In the United States, the average student loan debt for the Class of 2016 was around $37,000. The National Center for Education Statistics released new statistics on October 5th showing tuition repayment progress. These statistics showed that as of 2015, 60 percent of students still had to take out loans just to attend college.
But how do these statistics compare to the Northern Virginia/Washington D.C. area? According to the Office of the President at George Mason University, “the average amount of debt among graduates who borrowed is nearly $29,000. From 2004 to 2014, the average amount of debt for bachelor degree graduate borrowers nationwide has grown by 56 percent, which is more than double the 24 percent of inflation over the same period. In Virginia, average debt grew even faster from 2004 to 2014, with an increase of 67 percent, more than two-and-a-half times faster than inflation” (“Student Debt Trends,” n.d.). The student debt crisis has become a serious matter for borrowers from all demographics. The graph below shows that more than 42 million people have up to $100,000 in student loan debt, with about half of that figure owing between $10,000 to $50,000. More than 2 million borrowers
have student loan debt of more than $100,000. Surprisingly, George Mason students are in less debt than the national average.In the article, Is College Worth the Money, authors Aatum Desai, Sameer Gir and Adam Nohl look at the percentage of people living in every state in the United States compared to the unemployment rate. Their thought behind this was that the higher number of people that have a bachelor’s degree, the lower the unemployment rate will be. According to the article, “As technology reduces the supply of basic jobs,
the demand for jobs that require higher levels of education increases. Therefore, the question is raised in regards to how impactful completing a bachelor’s degree in college is as opposed to leaving education after high school” (Desai, 2017). Their study goes on to conclude that having a college degree does affect the unemployment rate and that it is beneficial to attend college.Parents, guardians, role models and politicians need to work together to push teenagers and young adults to pursue college degrees.
Many young people decide that they cannot afford tuition and books and so they end up not attending college, taking semester breaks, or dropping out. I interviewed Victor, who is a current employee at a pet store. Victor’s family was originally paying for his education, however, their finances were adversely affected by the recession and they could no longer afford tuition. Victor was unable to continue to pay to attend community college so he dropped out. When asked if he would ever attend college again, he said, “No”. Victor felt that he would not be able to handle both working and attending school. For his current job as groomer, he
felt that on-the-job training was more important than a degree. Of course, his short-term view, fails to take into account what he may need to progress in his career, such as higher education requirements for management. I also interviewed another pet store employee named Terence. Terence is a 22 year old studying to become a veterinary technician. Terence pays for his college education without the help of anyone else. He is taking a semester long break so that he can recoup some money to pay for the next semester. When asked if this will be the only semester break he will take, he said, “No”. Terence said that he will need to takes several gaps in order to continue to attend college. This is becoming the norm for college students in the United States.
According to a study done by Harvard University, “ Only 56 percent of the students who enter America’s colleges and universities graduate within six years, while only 29 percent of students who enter two-year programs complete their degrees within three years, the study found” (Waldron, 2012). They found that one of the main causes of the rising student drop out rate is the rising cost of college. According to the study, “The cost of college has nearly sextupled since 1985 and the total amount of student loan debt held by Americans surpassed $1 trillion in 2011. With as many as 25 percent of borrowers behind on their loans, the number of Americans seeking relief from student loan debt has increased substantially” (Waldron, 2012). Many don’t know that there are other options besides financial aid to help pay for college.
For many, the cost of college may be too much to take on. There are other options that can be pursued in addition to taking out a student loan. A student loan should be the last option. Colleges and the federal government give out grants, which don’t have to be repaid. According to Katie Loboso from CNN Money, “Most (grants) are awarded based on your financial need, and determined by the income you reported on the Free Application for Federal Student Aid, or FAFSA… Last year, undergrads at public colleges received an average of $5,000 in grant aid and those at private colleges received about $16,700” (Lobosco, n.d.). Another option is pursuing a work-study job. Colleges offer part time jobs on or near campus in which students can earn an hourly wage. Most work-study jobs are flexible with school schedules. Depending on the school’s location, the jobs can pay a competitive rate as well.
Most college students today work in addition to attending college, whether part time or full time. Some companies offer some sort of employee tuition reimbursement programs. Starbucks recently announced its new and improved College Achievement Plan. Starbucks has partnered Arizona State University to offer all part time and full time employees full tuition coverage and the cost of books. Unlike most companies, there is no minimum time that you have to work for the company prior to applying for tuition reimbursement. Employee tuition not only benefits the employee, but also the employer.
Peter Capelli, a graduate of University of Pennsylvania examines why employers decide to pay for an employees’ college in his article, Why do Employers Pay for College. Capelli points out in his article that, “Employers routinely provide financial support for their employees who pursue post-secondary education despite the fact that it represents perhaps the classic example of a “general skill” that costs the employers and raises the market wages of employees who posses it” (Capelli, 2003). Capelli raises the question, why would employers pay to educate their employees when having a college education generally equals a higher rate of pay.
In Capelli’s study, he finds that tuition reimbursement plans help employers attract a more educated and a better quality pool of potential employees in an era where potential employees are not just looking at the rate of pay but the benefits the company has to offer. Many companies now require that an employee be employed with a company for a certain amount of time prior to applying for reimbursement and a certain amount of time after receiving reimbursement, generally one year. Some companies as well require you to stay with the company for a certain amount of time after receiving reimbursement. Capelli finds that, “Turnover should be lower as well where employees use tuition assistance. Part of the explanation is obvious: As noted above, many employers require that employees be with the firm for some period before they receive tuition assistance. A smaller percentage require employees to sign contracts that make them reimburse the costs of the tuition benefits should they quit before some specific date.” By providing benefits such as tuition reimbursement, employers are more likely to stick with a job and/or company simply because of the fact that in addition to getting paid, they are receiving an education that may not have been attainable without the assistance of an employer. However, many associates are unaware of current education reimbursement programs offered by their employer. The two associates I interviewed, Terence and Victor, had no clue that their current employer offered any sort of tuition reimbursement. Both have been employed by the same pet store for over five years.
While the cost of college is rising and student tuition debt is at an all time high, getting a college degree is still very important and in certain ways, required. Having a degree sets those apart from others who did not go beyond a high school education. A degree shows that extras steps were taken to advance a career. Besides taking out loans, there are alternative ways to pay for college. Many people opt to follow the financial aid and grant route. in addition to those choices, there are also private scholarships available or the opportunity to receive money from an employer to pay for college. Young adults who receive a college education, on average, make more then their counterparts who did not receive a college education.
References
Capelli, P. (2003, November 27). Why Do Employers Pay for College? Retrieved November 05, 2017, from https://www.sciencedirect.com/science/article/pii/S0304407603002641#!
Friedman, Z. (2017, February 21). Student Loan Debt In 2017: A $1.3 Trillion Crisis. Retrieved December 10, 2017, from https://www.forbes.com/sites/zackfriedman/2017/02/21/student-loan-debt-statistics-2017/#15ad2e2a5dab
Lobosco, K. (n.d.). 7 Ways to Pay for College Without a Scholarship. Retrieved November 3, 2017, from http://money.cnn.com/2017/04/25/pf/college/pay-for-college/index.html
Student Debt Trends. (n.d.). Retrieved November 4, 2017, from https://president.gmu.edu/student-debt-trends/
Waldron, T. (2012, March). Study: Nearly Half Of America’s College Students Drop Out Before Receiving A Degree. Retrieved December 10, 2017, from https://thinkprogress.org/study-nearly-half-of-americas-college-students-drop-out-before-receiving-a-degree-68867634fa5e/
INTS 249 