The amount of student debt continues to accumulate. In one of my recent blogs, I quoted some statistics posted on CNBC in June, 2015 which showed staggering figures. “There is more than $1.2 trillion in outstanding student loan debt, 40 million borrowers and an average balance of $29,000.” I went on to say that the high levels “are serving to perpetuate or even worsen economic inequality and are undercutting the opportunity and social mobility that higher education should provide.”
Taking a broad view of the situation, it is clear that not much is being done to rectify this situation despite the impact of debt levels on the financial stability of college-educated households’ and the efforts by students to find solutions to the problem.
Roughly 40% of undergraduates and 76% of graduate students work at least 30 hours a week
Finding employment to pay college tuition while putting in the hours studying has always been the most effective method for handling the monetary demands of secondary education. But this doesn’t seem to be working anymore as college students find that the gap between what they can make in a typical student job and the high cost of tuition is almost impossible to close.
1970-2015
A recent survey by CNBC compared college costs today with those in 1970 and found that the average cost of tuition and fees at a private, non-profit, four-year university for the 2015-2016 school year was $31,231—up sharply from $1,832 in 1971-1972 (in current dollars). At public, four-year schools, tuition and fees cost about $9,139 this year compared to the 1971 school year where they added up to less than $500 in current dollars.
Harvard's $2,600 tuition in 1971 amounted to about 13 weeks' worth of the median household's annual income of $10,285. Today, the median household needs to work for almost a year to pay the full fee sending millions of students and their families into debt to make up the windfall.
Those who do not wish to—or are not eligible to-- receive student loans from private or public loan programs and choose, instead, to seek employment, find themselves falling more and more behind in the efforts.
A report released by Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce found that roughly 40% of undergraduates and 76% of graduate students work at least 30 hours a week, a number considered full-time by the IRS. About 25% of all working students are enrolled concurrently in college full-time and about 20% of them have children.
Carnevale’s study pointed to distinct differences in the long-term impact of juggling work and college in two different groups of students--16- to 29-year-olds and 30-to 54-year-olds.
Younger students, which make up two-thirds of all working learners, are mostly likely to be white women enrolled in bachelor’s degree programs. About 40% work full-time, mostly in food service or personal service jobs such as waitressing, etc.). Older working students are also largely female but are much more likely to be African-American, enrolled in a certificate or Associate’s degree program. They work mainly in managerial roles, have children and more than three-quarters of them work full-time while in school. This group is more likely to begin working straight after high school and go back to college to boost their career prospects.
Older Students Drop-Out Rate Higher
When presented with pressures of balancing work and school, the low-income, older working students were more likely to drop out which explains why community colleges struggle to reach their graduation numbers for students, who are typically older, low-income minorities.
Despite the drawbacks, there are, of course, certain advantages to students who work their way through college. Upon completion of a degree, the amount of debt is still lower for working learners than for those who didn’t work at all. According to Carnevale’s study, twenty-two percent of students who do not work while in college have more than $50,000 in student debt compared to 14% percent of working students. Lower debt is beneficial not only to the students and their family but for the general economy as well.
Another advantage to working while studying is the possibility of it leading to a continuation of employment with the same firm after graduation while reducing the pressure of finding a job as soon as a degree is received.
In addition, the experience gleaned during this time could lead to a higher starting salary and working learners were more likely to move into managerial and professional occupations than people who began working straight out of high school or did not work while in college.
Working students remain focused on finding a way to reach the light at the end of the tunnel and to somehow find a way to unload or at lease reduce their student debts—the sooner the better.