First Posted: 8/14/2014
Editor’s note: This is the second of a two-part series of guest editorials that examine the cost of a college education.
After a home, the largest single expense for most people will be a college education. Most people agree that a college degree is a sound investment, but it also pays to know how to keep those associated costs manageable.
One of the best ways to keep your college loans under control is to graduate on time. First-year students who entered college last fall, for example, have less than a 50 percent chance of graduating in four years. Colleges should be acknowledged for good graduation rates and vice versa. Florida, Pennsylvania, Colorado and other states have started using incentives to encourage colleges to boost on-time graduation rates. These incentives should lead colleges to pay greater attention to issues such as providing better academic advising, reducing class sizes, and insisting faculty teach additional courses. Actions like this increase student performance and retention, according to research.
Students and their families need to understand there is more to consider than annual tuition, and room and board when determining what college to attend. Rather it is these costs multiplied by the number of years a student is in college. A relatively low annual tuition at one institution can be more than offset if it takes a student five or six years to graduate. Those students who graduate late also give up months and sometimes years of salary and an earlier start to their careers.
Sometimes colleges and universities that have higher annual tuitions may turn out to be less expensive in the long run after their financial aid packages and their on-time graduation rates are considered.
Students should not focus on major courses early as freshman or sophomores. They should instead concentrate on completing core curriculum requirements. Too many students take courses germane to their field of study early in their academic careers and later find they do not count toward graduation requirements if they change majors.
Contrary to popular belief, starting at a community college and transferring to a four-year institution is often more expensive than spending four years at a single institution. Data show that students who transfer colleges – even from a two-year to a four-year institution – often lose credits toward graduation. Good articulation agreements between a two- and four-year institutions sometimes work well, but it is important to make certain those agreements exist before enrolling. Do not take someone’s word that the transfer of all credits is assured. Do your homework now and it will save you a lot of time and money in the future.
It is also important to note that students who work more than 15 to 18 hours per week while in college tend to graduate later than students who work fewer hours. While many students need a job to help pay tuition, some take jobs to earn spending money. This extra cash may seem important at the time, but working too much reduces the number of courses a student can take and usually their performance in class – thus adding time and cost to one’s college career.
Student loans are one of the fastest-growing segments of consumer debt in the country. Today, they exceed $1 trillion overall having surpassed total credit card debt. Massive student loans, however, usually result from several commonalities that can often be avoided:
• Popular horror stories about students graduating with significant loans fail to reveal that much of it is due to graduate school expenses. If students are determined to pursue a graduate degree they should carefully investigate the return on investment associated with graduates who have a similar degree and are currently working;
• Live like a student when you are one so that you do not have to do so after you graduate. Students should not consider designer clothes, expensive apartments and spring break trips as part of college expenses. Students should keep their credit cards in their pocket, spending down, and borrowing to a minimum.
Numerous studies have shown that a college degree is an investment that pays big dividends. On average, college graduates earn more than $1 million more over their lifetime than their peers who hold a high school degree. Take some time to consider the fallout in the job market from the Great Recession and the slow economic recovery: Only about 3 percent of college graduates are unemployed now, while about 10 percent of those without a college degree are jobless. Like any
investment, consider each decision carefully. Then remember, while a college degree is expensive, the only thing more expensive is not having one.
Michael A. MacDowell is president emeritus of Misericordia University in Dallas Township, where he occasionally taught economics. He is currently the managing director of the Calvin. K. Kazanjian Economics Foundation.