The average annual cost to attend a private nonprofit college averaged $45,510 in the 2018-2019 academic year. This compared to an inflation-adjusted $24,800 in the 1988-1989 academic year. After considering inflation, the cost of college has almost doubled in the past 30 years.
Free college tuition and forgiveness of college debt is a platform plank for several running for President in 2020. The appeal of such obviously varies from state-to-state depending on the prevalence and amount of student debt and likely the graduates ability to repay the obligation.
Student debt is blamed for the lowered homeownership rates, which is ironic as many people pursue college degrees to earn the income necessary to purchase a home in their pursuit of the American dream. While the purchase of a home is considered to be the largest financial decision in a person’s life, in actuality the cost of a college education can be just as large and critical.
Student debt varies from state to debt both in prevalence and amount by state. 24/7 Wall Street examined the following data (with the source in parenthesis):
- average student debt by borrower by state for 2019 (LendEDU)
- percent change in debt from 2016 to 2019 (LendEDU)
- proportion of student with debt (LendEDU)
- Attainment rate for Bachelor’s degree (U.S. Census Bureau – American Community Survey)
- Median household Income for those aged 25-44 (U.S. Census Bureau – American Community Survey)
The 10-states with the greatest average student debt per borrower are summarized in the following table. Pennsylvania’s average student debt of $36,193 topped the list among states, double Utah’s $18,425 (least in the country).
A higher paying job does not necessarily require a college degree. The following table shows the 10-best paying jobs available without a college degree along with an employment growth projection from 2016 through 2026. While these jobs do not require a Bachelor’s degree, they do require either on-the-job training or technical school training (often both). These data were sourced from the U.S. Bureau of Labor Statistics by 24/7 Wall Street.
Just because a person had a Bachelor’s degree does necessarily not equate to a higher level of income. The following are the 10 colleges with the worst earnings for holders of Bachelor’s degrees. 24/7 Wall Street reviewed the median earnings of those with college degrees 10 years following graduation among students that received federal financial aid. They calculated a metric comparing the median income of these grads to the average annual tuition and fees to identify the colleges that pay off the least. These are all comparably small schools as seen by the undergraduate enrollment numbers.
To read the entire study on average debt per student including all 50-states click https://www.usatoday.com/story/money/2019/07/12/debt-crisis-student-loans-states-where-graduates-have-most-debt/39617185/?utm_source=oembed&utm_medium=onsite&utm_campaign=storylines&utm_content=news&utm_term=3625592002
The article on the top-paying jobs without a college degree can read at https://www.usatoday.com/story/money/careers/2019/07/21/highest-paying-jobs-you-can-get-without-a-college-degree/39701321/
The study of the Colleges with the lowest paying graduates can be viewed at https://www.usatoday.com/story/money/2019/07/21/student-loan-crisis-top-ranked-colleges-that-pay-off-the-least-income-tuition/39682401/
As usual, I invoke the TINSTAANREM axiom — There Is No Such Thing As A National Real Estate Market, nor is there such a thing as typical student debt by state, income by position or earnings potential for a Bachelor’s degree. Obviously not everyone looks at the college expenses in a cost-benefit perspective. Perhaps they should.
In my opinion, every student prior to entering college needs to know the economic benefits and costs of college degrees.