Today I Learn… I make a point of learning something new everyday. This is what I learn each day

1, Dec 22, 2012

College degree, cost, investment and returns

Filed under: College — admin @ 12:46 am

On 12/10/2012, I read an article by Jill Martin “US student loans: The trillion dollar debt trap.” The article cites some depressing yet also familiar examples of young people heavily burdened by student debts.

One 27-year-old with a PhD and $150,000 debt. She is expected to pay monthly payments of $1,600. “I just cannot pay that amount,” she says, and having tried to negotiate with several lenders without success, she is losing her will to fight. When I read this, I was thinking “If you cannot make that much to pay for this degree, why did you borrow for that degree in the first place? Why couldn’t you get scholarship for it?”

She is very much representing the widespread student debt problem of the nation, a one trillion dollar headache for the US economy – and it is only getting worse.

“As the cost of a university education soars, default rates are on the rise. Some estimates say that more than five million borrowers in the US have defaulted on their student loans. Almost 375,000 people defaulted in the latest year alone, the US Department of Education says.”

Indeed, if the young graduates cannot find jobs to even make a living, they have no other choice but defaulting their debts.

This once again forces us to consider the question of investing in a college degree, its cost and its return, and for some people, whether or not this investment is worthwhile. If you cannot recoup the cost of that degree in the next decade or two, ask yourself if you are better off investing your time and money elsewhere.

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