How the Average Joe Can Pay for School
Don't be a confused college student.
By Kathryn Knight
April 21, 2009
Meet College Joe. He attends a four-year university and is going to graduate in May. Unfortunately, College Joe had to take out a lot of loans to pay for his education. When he graduates, he’ll be roughly $21,000 in debt.
What’s worse is that College Joe has no “real world” job prospects. In fact, he’s been hearing from most of his peers that the job market is a tough place right now. He also hears that graduate students can defer ALL of their loans while they’re in school. So what does College Joe do? He starts studying for the GRE in hopes of going to graduate school after graduation.
College Joe seems like a smart enough guy. After all, he’s graduating in four years. And during his senior year, when the biggest concern is typically which kegger to attend, College Joe is thinking about his finances. But going to grad school to avoid paying off student loans isn’t necessarily the brightest idea. Yet, many College Joes are jumping on board.
During the past ten years, the cost of college has risen 83% while the wages for college graduates have only increased by 38%. To top that, the projected growth of entry-level jobs for college grads in 2009 is 1.3%, compared to 14.3% for the Class of 2008. No wonder students are heading toward the safe haven of graduate school.
But is it the best choice? Many career guidance counselors at colleges say absolutely not. Students going straight to graduate school from college will be setting themselves up with more debt and less marketable work experience. In fact, master’s candidates at University of Wisconsin-Madison graduate with roughly $31,000 in debt while PhD candidates graduate with almost $33,000. Add that to your $21,000 from your undergraduate years and you’ve got yourself a lot of debt.
College students need to ask themselves if going to graduate school will help them achieve their desired salary and whether or not it will be enough to repay the debt.
They should also look at increasing their employment options through specific public-service opportunities. Programs like AmeriCorps, the Peace Corps, and Teach for America provide stipends for “employees” while the government defers, or in some cases forgives, student loans. Also, the government offers loan forgiveness for military service or for doctors, nurses, or teachers working in high-need areas.
To get an idea of how much you’ll owe after college, use the FinAid Student Loan Advisor to figure out projected monthly payments for your student loans.