Many Americans are concerned about the exponential expenditures associated with getting a college education, and for good reason. According to a 2018 Forbes article, “the cost to attend a university increased nearly eight times faster than wages did…between January 1989 and January 2016…While the cost of a four-year degree exploded to $104,480, real median wages only went from $54,042 to $59,039 between 1989 and 2016.” Given these figures, it comes as no surprise that “student loan debt” is a “$1.5 trillion crisis,” also as per Forbes. With these troubling trends in play, many students, parents, and educational leaders want to more carefully consider the cost of college and work to wisely reduce it.
At the Myers-Briggs Company, we conduct extensive educational research in order to support our career exploration and study skills enhancement assessments on our VitaNavis® platform. In our study of this subject, we’ve come across a surprising but true statement about which type of instruction comes with the highest price tag. In the following blog, we’ll explain our answer to the question “what is the most expensive education?”, discuss why this is the case, and provide our suggestions for avoiding this pricey predicament.
The Costliest College Experience
The “most expensive education” isn’t a degree from the most prestigious university in the nation or one that requires the most exorbitant compound interest loans, although these elements could certainly contribute to educational expenditures. According to the U.S. Department of Education, the answer is much more fundamental: “The most expensive education is one that doesn’t lead to a degree.” Unfortunately, many students enroll in college, take out student loans, pay for books, and more, but never actually earn a degree. These pupils are actually paying the most for their education because they’re getting no real return on their investment. They bear the financial burden of having gone to college without having a degree to show for their efforts.
Factors That Exacerbate Educational Expenses
There are a variety of interconnected reasons why failing to complete a college degree is, in fact, the most expensive educational option.
First of all, students who leave school are still responsible for the tuition payments, student loans, textbooks, rent, food costs, and other expenses associated with the time they spent in college. As the U.S. Department of Education explains, “while graduating with high levels of debt is holding too many borrowers back from reaching their full potential, the even more damaging outcome is for students who take on debt but never complete their degree.” Students who drop out are responsible for all the debts they’ve accrued during their time in college.
However, when these students go to apply for jobs, they don’t get to list their degrees on their resumes. This leads us to the second reason dropping out leads to the highest educational cost: students who don’t graduate have significantly lower earning potential than their peers with diplomas. Not having a degree can make a tangible difference on students’ financial futures. Forbes reports that “the typical college graduate will earn roughly $900,000 more than the typical high school graduate” and “a college graduate is 177 times more likely than a high school graduate to earn $4 million or more throughout their lifetime.”
These financial pitfalls show when it comes to student loan repayment statistics, since the U.S. Department of Education reports that “students who take out college loans but don’t graduate are three times more likely to default than borrowers who complete.” This is likely because they have trouble finding jobs that pay them enough to both support themselves and pay down their student loan balances. Similarly, a 2018 CNN Money piece cites a report from the Federal Reserve and points out that “just 11 percent of those who completed a bachelor’s degree were behind [on student loan payments] and 5 percent of those who had a graduate degree had fallen behind on payments.” This suggests that college graduates find it easier to keep up with their student loans than their peers who left school, probably because they’re able to secure higher-paying jobs.
Of course, students who are struggling to repay their student loans tend to find their debts start to snowball. Another challenge for college dropouts is the often-crippling effect of compound interest. The longer students are unable to pay their loans, the more interest they accrue, causing their debts to skyrocket.
In addition, it’s worth considering why students leave college to begin with. In a twist of tragic irony, many of them likely feel that it might be financially smarter to cut their losses and start working full-time to pay off their mounting student loans. Some students might also leave because they don’t see how their degrees relate to their professional goals, or perhaps because they lack clear vocational goals to begin with. These students will likely flounder even further once they drop out, since they don’t have clear career plans. Without well-defined goals and professional pathways, students may work at jobs they dislike, with little opportunity or motivation to seek advancements that might raise their salaries.
How Many Students Are Stuck with the Priciest College Education?
Unfortunately, despite the fact that it often is the most expensive education, dropping out of college is all too common. The U.S. Department of Education notes that “more than 40 percent of first-time, full-time students who enroll in a bachelor’s degree program don’t graduate within 6 years.” As a 2018 Forbes article stated it, “nearly 2 million students who begin college each year will drop out before earning a diploma.” These students are getting the worst of all worlds – all the hefty student debts without any of the advantages of a college degree. Clearly, something needs to be done to reverse this costly trend.
Proactive Solutions for Lowering the Cost of Higher Education
Students can avoid the hazards of an incomplete college education by planning for their academic and professional futures in advance. For example, by using interest assessments, such as the SuperStrong assessment from The Myers-Briggs Company, they can align their goals accordingly and work with career counselors to design a clear pathway to vocational success. This may or may not involve a college degree (after all, some high-paying, fulfilling professions don’t require higher education), but if it does, they’ll be more motivated and prepared to persist through their studies, knowing that their investment will ultimately lead them to a career path. With a clear strategy in place, students can make informed decisions about their educational expenses and confidently follow through with their choices.