argumentative essay is a college degree worth incurring significant debt

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College debt is one of the largest financial burdens young people face today

Ayesha Rascoe

Nearly half of college students who take out loans for school don't finish within six years. Isabelle Praget is struggling with this kind of debt, and she speaks with Ayesha Rascoe about it.

AYESHA RASCOE, HOST:

College debt is one of the most crippling financial burdens young people face today. What's more, nearly 40% of student loan borrowers don't finish their degree within six years. That's according to the Hope Center for College Community and Justice. So they end up with thousands of dollars in student debt and no degree to show for it. One of those borrowers is our guest, Isabelle Praget, who's now an operations manager at the University of Washington, and she joins us now from Seattle. Welcome.

ISABELLE PRAGET: Hi. Thank you, Ayesha.

RASCOE: Isabelle, you attended the University of Texas at Austin more than 10 years ago. What led you to leave the school?

PRAGET: Yeah, it was a combination of things. One was not really feeling like the major was something that would help me in the future. And then there was also the fact that I was starting to accumulate that debt, and so I needed to switch from part-time to full-time jobs and - you know, to try to make ends meet. So I just decided to stop, thinking, oh, I'll come back to it. And, of course, life happened, and I never did.

RASCOE: So how long were you at UT Austin, and what was your major?

PRAGET: I was there for three years, a break, and then I would try to go back for another year at part time. My major was international studies with a minor in Spanish, so I was hoping to do something, you know, a little more global. That's one of the years I took off, was when I was teaching in Spain. But my path just went down operations. So it didn't really felt necessary anymore, and I just kind of kept going with my real-life training versus my college education.

RASCOE: How close were you to graduating?

PRAGET: Painfully close. I think if I were to pull up my transcript, I was somewhere in, like, the 30-ish credits. And that's because when I came back, I went part-time. So that's why I missed some credits. Otherwise, yeah, I would have graduated that final year.

RASCOE: Tell me about that, that real-life work that you've been doing. So you've been working in operations. Have you been making good enough money to pay off the debt that you got when you were at college?

PRAGET: So I definitely did not start of making good enough money. I did, like, the minimum payments at first, and then I, you know, did all the deferrals and all that fun process of bureaucracy and paperwork that you need to go through to kind of get people off your back. But I have been in some positions where I've been offered less than I could have if I'd had my degree. In my current position that's how it started. I was offered a position about $20-, $30,000 less than I could have been making if I had that on my resume.

RASCOE: And so fast forward to today. What's the total amount of your loans?

PRAGET: Total amount right now is somewhere in the 60,000.

RASCOE: OK. And that includes interest?

PRAGET: Correct.

RASCOE: So including interest is 60,000. That's a lot of money.

PRAGET: Yeah.

RASCOE: How are you juggling, like, having $60,000 in debt, which is a lot, and caring for yourself and your family?

PRAGET: Yeah, it's been a struggle. And it's also not just my own debt. My partner also has their college debt. They did finish with their degree, but they're also not doing anything remotely related to their degree. They were also an international studies student, and now they're an account experience manager. And now we have two kids. So it's been - I won't say paycheck to paycheck. We have been very lucky in that sense. However, it's still a struggle. You know, we still rent, and we're in our mid-30s. We - like I said, we have two kids now. And we just haven't really been able to set down those roots because we always have this looming on us where everything extra goes to that.

RASCOE: You have two kids. Are you hoping they'll go to college but not have to take out loans? I don't know how that will work. Are you hoping they'll just be really smart or, like, play ball really well?

PRAGET: (Laughter) Right.

RASCOE: That's kind of what I hope it will happen.

PRAGET: Yeah. I secretly do hope that, but I'm definitely - I mean, the oldest one is 4, and the little one is 6 months. So I really don't have to worry about it yet.

RASCOE: You have time. You have time.

PRAGET: But I am already kind of, like, crafting that in my head of how am I going to tell them you can literally do whatever you want? Like, I don't want to push these traumas that I have of not finishing or, like, what my parents always said, like, you have to go to school. Like, no. Take your gap. Go to technical school. Don't go to college. Like, whatever is best for you and the way that you learn and what you want to do is OK by me.

RASCOE: Isabelle Praget, thank you so much for joining us.

PRAGET: Thank you, Ayesha.

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clock This article was published more than  11 years ago

The value of a college degree vs. the debt it takes to earn it

By Katherine Pilnick

Higher education becomes more expensive each and every year. Tuition costs rise twice as fast as typical inflation, making college less affordable for average Americans with every passing year. Faced with such high costs and near-universal financial hardship, students can find it difficult to determine whether college is actually worth the price tag.

It’s important, then, to look at the expected value of one’s degree versus the estimated amount of debt the student will incur. Both the value and the cost widely differ based on a number of factors, such as whether a student plans to attend a public or private school, whether the student plans to live on campus and what the student plans to do after graduation.

Viewing the problem in its simplest terms, those with bachelor’s degrees earn an average of nearly $1 million more over their lifetimes than those with only high school diplomas. An individual with a bachelor’s degree can expect to earn $2.27 million over a lifetime, while a high school graduate typically earns only $1.30 million. Those with some college earn only slightly more than those with no college at all, with total earnings averaging $1.55 million.

This means a college degree is worth, on average, $970,000.

Of course, the problem is not so black and white. Those who go into high-paying jobs will find more value to their degrees. In contrast, the growing number of college graduates who cannot find work may struggle to find any value in their education. This is especially true for those individuals who owe thousands of dollars in student loans .

High amounts of student debt – and the corresponding stress – reasonably detract from the inherent value of a college education. Before committing to their dream schools, students should get an idea of how much debt they’re willing to accept.

Tuition was an average of $28,500 at private schools in 2011, with students typically paying only $12,970. The other 54 percent was covered with funding such as scholarships, federal grants and financial aid. This gives a general starting point for students to estimate how much they’re expected to pay, not including room and board or fees such as costs for textbooks and transportation.

Most experts agree that one’s total education debt should be less than one’s expected income the year after graduation. For example, assume a student can pay for room, board and fees but takes out $13,000 in loans each year to pay for tuition at a private school. That’s $52,000 in debt for four years of school. Experts suggest that taking on that amount of debt is wise only if the student expects a starting salary of $52,000 or greater.

As with other estimates, this advice should be taken with a grain of salt, as each student’s needs and abilities vary. Perhaps one student’s parents are able to chip in, while another student is willing to hold jobs throughout college. Public universities provide a cheaper option for many students, as well.

For the average American student, however, experts say to err on the side of caution. Student loans are almost never forgiven during debt-relief methods such as bankruptcy, so they stay with debtors until they are repaid in full.

If students can’t afford the college of their choice, it doesn’t mean they should skip out on higher education altogether. They should consider options like attending a community college for two years before transferring to their dream school. They will earn the same degree but at a lower sticker price.

While a college education is valuable, it’s important to weigh its long-term worth against its immediate cost. There are always options for those who want a good education.

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Is a College Degree Really Worth the Long-Term Debt?

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Opinions are split, but not evenly.

In spite of soaring student debt, often heralded as a crisis by the national media, the majority of students still say it was worth going into debt to get their degree.

This is in spite of the fact that US graduates are carrying a staggering $1.5 trillion of debt, and over a quarter of graduates surveyed in 2016 (who still had student loans to pay off) were looking at a very significant $43,000 or more in student loan related debt.

However, according to a 2019 national poll , the majority of graduates (around 61%) said that they thought that their degree was worth the debt they’d incurred. And this was higher among those who had actually graduated with a four year degree. As this Forbes article pointed out, the majority of those who said the debt incurred wasn’t worth it, were those who didn’t end up graduating. What is perhaps most surprising is that even this group was fairly evenly split. Around 47% claimed the debt was worth it, even though they left college without a Bachelor’s degree.

So that’s the opinion of graduates, but are they kidding themselves?

It is true that a degree increases earning power, but is it enough to justify your debt? According to Smart Asset research from 2018, the average annual salary of a US worker with a Bachelor’s degree was $59,124, with an unemployment rate of 2.8%. With a high-school diploma, it was $35,256, with a 5.4% unemployment rate.

Even an unfinished degree gives your earnings a small boost. Those who had completed some college but had no degree were on an average salary of $38,376. It seems likely that these ex-students really are kidding themselves. The small increase in earnings is unlikely to compensate for their debt burden, depending on how much debt they have and how expensive it is.

But for those with a full degree and an extra $15,000 a year to pay off student loans ? It’s not surprising they feel the debt is justified.

Your bank account will thank you

We share useful money tips each week to help you enjoy life more with less money stress.

Does it depend on the degree?

Almost certainly, yes. All education is not equal. A degree in law, medicine, or engineering will undoubtedly pay off, whereas one in liberal arts might not. There are still professions that don’t require a degree and, controversially, some claim that a degree can even hinder you, precisely because of the debt incurred.

Elizabeth Gilbert stresses this point in her book,  Big Magic: Creative Living Beyond Fear . She advises young writers to avoid the traditional MFA path, saying it can actually hurt your career as a writer. Not because it will have a negative impact on your writing, but because the debt it generates forces young writers into career choices that prioritize money over artistic integrity and creativity. As Gilbert puts it:

“Nobody needs debt less than an artist.”

Is college about more than financial ROI?

Again, almost certainly yes. College is about spreading your wings, gaining your independence, trying out new activities and experiences that may have nothing to do with your formal education, but everything to do with your personal growth.

It’s also, significantly, about the people you meet. An often overlooked aspect of college life is that you potentially graduate with hundreds of contacts who will be in your industry, or related ones, throughout your working life. This goes for both ‘soft’ and ‘hard’ subjects.

Knowing the right people to collaborate with on your next engineering project, fashion collection or TV production can be invaluable. Teachers find out about new positions when members of their network mention someone at their school is quitting. Executives in industries such as advertising and design are likely to draw on their own contacts when employing new team members, and when looking for freelancers.

Related Articles from our Network

🎓 How to Put Your Kids through College for Less Money ( Wealthtender )

💡 Use a 529 Plan to Save for College and Save Thousands of Dollars ( Wealthtender )

💸 How to Save Huge on a College Education ( Wealthtender )

So should I take on debt to get a college degree or not?

Frustratingly, the answer is still maybe. Here are the things you need to consider:

• Is a degree important in my chosen career?
• How much debt will I have take on?
• How much extra will I earn with this degree?
• Will that ‘extra’ more than cover loan repayments?
• Will I definitely complete this degree?
• Is college going to benefit me in other ways?

There are millionaires with college degrees, and millionaires who dropped out of high school. For the average American, college is (often) worth the price tag. But not for every profession and not for every individual.

As with any debt, your student loans are something you should take on with a plan as to how you’ll pay them off, so crunch the numbers first. Know how much debt you’re taking on, what your interest rates will be, how long you’ll take to pay off loans, and perhaps most importantly, what your projected earnings will be with your chosen degree.

Other articles you may enjoy:

• The Best and Worst Ways to Use Your Credit Cards
• What is a Financial Coach (and How to Find the Right One for You)

About the Author

Karen Banes

I’m a freelance writer specializing in online business, personal finance, travel and lifestyle. I also work as a content creator for hire, helping brands and businesses tell their stories, grow their audiences, and reach their ideal customers. I’ve lived, worked and studied in six countries, across three continents. Stop by my blog  TheSavvySolopreneur.net  to learn how to run your own (very) small business on your own terms. You can also connect with me at my website  KarenBanes.com  or follow me on  Medium.com . 

Home — Essay Samples — Education — Student Loan Debt — The Issue of the Increasing Student-loan Debt in the United States

The Issue of The Increasing Student-loan Debt in The United States

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Published: Oct 31, 2018

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