We’ve been telling high school students for decades that if you want a better paying job, go to college. And while that’s generally true, it’s not a guarantee. Planning ahead will help ensure your degree jumpstarts a successful career.
College involves a financial decision. These days, it may be second only to buying a house. Financial planner and teacher Rob West has advice on making your decision pay off on this MoneyWise Live.
Here are some bullet points to think about when considering your educational direction:
From the Pew Research Center:
- Working college grads earn $17,000 per year more than high school grads and that’s just when they’re starting out. Year after year that adds up to great deal more earning power over a whole career.
- That number reflects college grads who enter the workforce successfully landing good jobs ideally in their fields of study.
- You want your course of study to give you skills that an employer is willing to pay for.
From Georgetown University Using data from the Census Bureau:
- The median salary for new grads with entry level architecture and engineering degrees is $50,000.
- For computer, statistics and mathematics majors, the starting median salary is $43,000.
- Your earning potential could increase with a graduate degree depending on the field. An undergraduate degree in the health field earns a median salary of $41,000 to start out.
Most college students graduate with some student loan debt so that makes it even more important to plan ahead. The average student loan debt is around $40,000. It's strongly advised students do everything possible to keep that debt as low as possible and certainly no more than what you would expect to earn in your first year's salary. This will ensure you can pay it off in 10 years.
It's simply a fact of life that some occupations pay more than others. You have to factor in the fact that the median starting salary in education is below $32,000 a year and social work is even lower at $28,000.
If you’re called to lower paying professions, you have to understand that it will be more difficult for you to pay back your student loans than for someone in Science, Technology, Engineering and Mathematics.
You should also consider job satisfaction. As the saying goes, "find something you love to do and you’ll never work a day in your life." But that has to be weighed against the earning power of any major you might consider if you’ll have to pay back student loans.
Next, Rob and Steve answer some listener questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:
- If you're a newly wed couple with $116,000 left on mortgage and you have an extra $1900 to spare each month after tithing and saving and paying bills, what should you do with the extra money?
- Are Social Security survivor benefits taxable income and do they affect eligibility for student aid?
- If you have multiple IRAs held and different institutions that require Required Minimum Distributions, do you have to take separate distributions from each institution or can you aggregate them?
- If your husband just lost his job and you're about to sell your home, what are some tips to make the transition move smoothly?
- If you've just recently undergone financial troubles and are essentially starting over financially, what are the steps to begin again?
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