One of the biggest costs than any adult will have, and one of the most common reasons for financial problems, are student loans that many of us take out in order to pay for college. There are many myths, rumors and misconceptions about student loans, what type of interest they have and what the rules and laws are about repaying the money. While conventional wisdom would say that parents and students do their research on college cost before making a commitment, the fact is that many parents get in way over the head with college costs and many students who pay for their own college using college loans do even worse.
Today we’ve put together a blog with some of the myths and misconceptions about college loans that you need to know about if you’re going to be going to college or paying for your child to go. So before you move on to an institution of higher learning, let us educate you a bit here. Enjoy
As far as recent numbers are concerned, if you’re going to attend a public college or university in the state that you live in you will pay approximately $9000 a year for tuition. The same school, if you are from out of state, will cost you about $21,000. The average private college is just under $30,000 a year, and there are quite a few that cost more than that. Once you add in room and board the cost for most public/state schools is going to be about $50,000 after four years and, at a private one, just under $170,000. Knowing these numbers won’t make them easier to swallow but it should give you an idea of the financial hole that you’re going to be digging for yourself.
It’s a hole that has recently fallen under criticism from many education specialists who say that the higher education system, especially in the United States, is broken. They argue that the enormous cost of sending a child to college doesn’t justify the meager results that most will achieve afterwards. While costs spiral out of control the quality at most colleges and universities is actually declining. Adding to the problem is that there is now international competition for students and getting a degree overseas is not only less expensive but it might actually be more productive and gives a student a better base to start from in the professional world.
Many people believe that if they go to a specific college their chances of success will be higher. There are a number of studies that have been done and one of them is a shining example of how this is just not true. In Pennsylvania it costs nearly $44,000 a year to attend the University of Pennsylvania, a private university. To attend Penn State, a public college in Pennsylvania, it’s approximately $16,500 a year. When these two schools were compared as far as average starting salaries, midcareer salaries and a number of other statistics, there was practically no difference in the lifetime earnings between the graduates of the University of Pennsylvania and Penn State. The fact is, just because a college or university is extremely expensive doesn’t mean that the actual education that will be received, or the chances for financial success, are going to be any better.
Another common misconception about college is that most students will graduate within four years. The contrary is actually true as nearly 60% of graduates take six years to achieve their diploma. Not only that but there are thousands of students who start school but never finish. That leaves them in a sad financial state with absolutely nothing to show for it, a situation that can be crippling financially and affects someone’s financial situation negatively for years. For the students who actually do finish it means much higher student loan debt to pay off.
Worrying about a specific major is another mistake that many people make when it comes to their college or university education. While it is true that in some major industries such as engineering or medicine the actual major that you take does matter, the truth of the situation is that once you’ve gotten a few years of experience in your chosen field what you majored in while in college really doesn’t count for very much. What most employers are looking for in their employees is the ability to quickly learn on the job. If you’ve received a well-rounded education and can think on your feet your major isn’t nearly as important as you think it is.
One of the biggest misconceptions about college is that going to a community college is for losers and people who aren’t able to afford a ‘real’ college. This is simply untrue as many surveys have proven. Generally speaking, students who have gone to a community college first before going to a four-year university are graduating more quickly and with better results. The fact is, a community college is a great choice for student who don’t exactly know what they’re going to do. They can go there, find out, and then move on, having spent the minimum amount of money on their education needed to get the answers they were looking for.
In the end, college should be looked at just like any other business decision. If you’re going to put in money you need to know what you’re going to get out of it. Invest your time as best as you can and, once you’ve had some success, expand to a higher level of education as needed. Do this at a steady and organized pace and when you’re done you’ll find that you have a diploma that’s valuable and the means to pay back your debt quickly.
We hope this blog has been interesting and educational And we hope that your college career is the same. Come back and visit us often will as will be here giving out advice, info and interesting tidbits on a regular basis. See you then.