Abandoning or delaying a 4-year degree goes against the grain for most affluent families in the U.S. It opposes a core belief they’ve developed, possibly over the past several decades. It’s the idea that vocational education is for students who are underachievers or possess lower intelligence. This belief has been proven false.
Honors students are electing to attend trade schools to attain two-year technical certificates. They will start their careers and earn an income more quickly while doing something they are passionate about.1 Isn’t it time to ask for the sake of what is my child planning to attend a 4-year college?
Cost of a 4-year degree
It’s no secret. The cost of a 4-year degree continues to increase. The estimated total price tag including tuition, fees and living expenses for an in-state 4-year bachelor’s degree at Penn State is $143,032.2
If you’ve saved enough money to cover the expenses for your student to obtain a 4-year degree, ask if your child’s goals and resulting income are in line with the costs. If you do not have a college fund, then seriously consider the struggle that will accompany paying a debt of potentially more than a hundred thousand dollars.
The interest on student loans is often an afterthought, but it can add a significant amount to the original loan. For example, if you or your child borrows $85,368, it will total an estimated $105,922 with interest and the monthly payments will be approximately $882 for 10 years.
Experts recommend that students not borrow more than they can pay back using 10% of their monthly income earned after graduation. In the example above, your child will need to graduate earning an annual income of $105,922. In contrast, according to the National Association of Colleges and Employers, the average college graduate can expect to earn $45,478 following graduation.3
Ask how this debt will affect your future
With those figures in mind, consider the following questions:
- How will the loan get paid?
- What will the outcome of the process be for my child?
- How will the added stress of debt affect you and your child?
- How will it affect your overall family dynamics?
- What will your family need to sacrifice now and in the future to manage this debt?
- Are you sacrificing your retirement to help fund your child’s education?
NOTE: According to a 2014 analysis from the Consumer Financial Protection Bureau (CFPB), 68 percent of student loan borrowers age 60 and older reported their debt was owed for a child or grandchild’s education.4 Search my blog for additional information on this topic.
Reduce the level of anxiety
Just by taking a little extra time to explore options, you and your student can reduce the level of anxiety about pursuing new education and career paths. It could mean the difference of long-term financial success for both of you.
Even with increased college enrollment, “40% to 50% of kids never get a college certificate or degree,” explained Tony Carnevale, director of the Georgetown University Center on Education and the Workforce. Sadly, about one-third of the college degree graduates end up in jobs that don’t require a 4-year degree.1
Tips for designing a profitable career path
- Give yourself and your child permission to go a new direction. Then, consider a new common sense, profitable approach to a career path.
- If your child selects trade school as an alternative to a 4-year degree and completes courses in business, she has the option of building her own business. Being an entrepreneur can be risky, but it’s one of the most common ways to start earning $100,000 or more after college.3 If the business fails, she can easily return to practicing the skills she acquired through trade school. Search my blog for additional information on this topic.
- By taking the common sense approach, you and your child can avoid significant debt and she can earn an income while continuing to pursue a 4-year degree if desired.
- Examine what really matters to you and your child. Career stability? A sense of purpose? Immediate profitability? Long-term success?
- Allow discussion for new ideas and explore the options. Collect information on salaries, educational and experience requirements. Examine the current trends in employment.
- Design a career path that’s lucrative. Graduates of vocational programs can make $80 an hour. Transform your child’s dream into a functional career path.
Current occupations requiring an Associate’s degree with a median pay of $75,000 or more per year include air traffic controllers, nuclear technicians and radiation therapists. Radiation therapists are projected to have the highest number of new jobs from these career options.5 Students could complete the program within two years, making $75,000 a year, and be debt-free.
How to increase the odds of a successful future
Ambiguity and lack of purpose prevent successful change. Exploring new options with your child now can help prevent needless struggle down the road.
I’ll help you and your child articulate a sense of purpose and design a path that outlines what success means for them. Contact me for details.