I was lucky to graduate a couple years ago without any loans thanks to some generous scholarships from Babson. And I am absolutely in the minority. Almost all of my friends ship out $200-$500 a month from their paychecks to pay down college tuition loans. Even those paying these loans off on the aggressive side will continue to devote a huge fraction of their paychecks to paying down this debt for the next 5 years of their lives. The effects of this on things like the ability for our generation to purchase a home and make other large purchases like automobiles are being examined by economists, but what about the impact this debt has on the defining factor of career choice?
A Pew Research survey and study aimed to answer this question, with results put forth in a recently released report called Is College Worth It? The most prominent effect of this debt is of course on making ends meet and paying bills — rent, travel, cable, Internet, car insurance, etc. But one of the most striking statistics from that report is that a full quarter of students say their loans and tuition debt fundamentally affect their career decisions. I fall in this camp, as not having loans has enabled me to dive into startup life and help build Streetwise Media, the company behind this site. Had I graduated with loads of tuition debt, I would not have been able to pursue entrepreneurship this early in my life.
Another interesting takeaway from the study: 42% of college presidents believe college is affordable, while only 22% of the American public feels the same.
The average borrower graduates from a four year college with $23,000 in debt. With tuition costs increasing at many schools, its affect on career choice is certainly a topic of discussion. We give kudos to MIT, one of the world’s most distinguished higher ed institutions, for focusing so heavily on this issue for their bright students. From 1998 to 2007 the school cut average student loan debt in half; it now sits at just over $15,000.
Have student loans impacted your career decisions (or that of your kids)? Let us know your thoughts and stories in the comments.
Deciding which college is best for you? Check out this list of Boston area colleges with the highest ROIs.
