Debt: A Growing Concern

Is the financial investment in college justified by the economic returns? My perspective has shifted from a confident affirmation to a more cautious stance. This change was prompted by research for my article titled "In the Rental Economy, We Won’t Own Anything Anymore."

In that piece, I examined why many young adults are opting to rent stylish furniture rather than purchasing it, as they grapple with student loan debts and lackluster job prospects. The dream of homeownership feels increasingly unattainable, leading them to choose a more aesthetically pleasing living environment instead.

Debt has become a pervasive issue. According to Bankrate, the average debts in 2020 were staggering:

• Credit card: $5,315
• Personal loan: $16,458
• Auto loan: $19,703
• Student loan: $38,792

Couples just a couple of years out of college often find themselves burdened with over $100,000 in combined debt, making homeownership feel like a distant dream.

The Risks of For-Profit Colleges

One of the most significant predictors of failure is enrolling in for-profit institutions like the University of Phoenix or DeVry University, which primarily exist to collect tuition fees. These colleges prioritize profit over student success.

In February, the U.S. Department of Education announced debt relief for 16,000 borrowers who were misled by institutions such as DeVry University and ITT Technical Institute. While DeVry remains operational, prospective students should proceed with caution.

Other institutions to be wary of include unaccredited colleges, religious schools, and certain art institutes. Personally, I would hesitate to hire graduates from religious colleges for roles with significant responsibilities.

A student’s ACT or SAT score serves as a strong indicator of their potential success in college. The national average SAT score for 2021 was 1060, with the top 100 colleges requiring scores around 1200. Students with scores below 900 are likely to struggle and may benefit from exploring alternative paths.

Job Prospects After Graduation

Unfortunately, job opportunities for liberal arts graduates have diminished significantly. A bachelor’s degree, once a reliable ticket to employment, no longer guarantees a job. Employers are now looking for candidates with specific skills rather than simply a degree.

It's crucial to note that my analysis is focused on economic considerations, rather than the social value of education. Additionally, the landscape of post-secondary education is likely to undergo significant transformation in the coming decade. While campuses can foster valuable social connections, they may not always provide the best learning environments.

Online lectures from top universities are becoming more accessible, allowing students to benefit from AI-based personalized tutorials instead of traditional classrooms. While personalized AI tutoring is still in its early stages, it will likely become commonplace in the future.

Reflections on the Future of Education

This article began as an extensive exploration of alternatives to the traditional four-year degree, but I recognize the need to break it into more digestible segments.

Young individuals are grappling not only with student debt but also with the financial demands of everyday life, such as transportation and housing. The high rates of failure among unprepared students are compounded by extended graduation times due to insufficient course offerings.

In my next piece, I will examine community colleges that offer graduates pathways to lucrative careers without the crippling debt often associated with four-year institutions.

Engagement and Feedback

I welcome your thoughts and critiques, particularly if you disagree or notice any errors. Your feedback sparks new ideas for future articles, and I’m always eager to hear your insights.

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The first video explores the question: "Is college worth the debt?" and discusses the financial implications students face today.

The second video poses the question, "Is a university degree a waste of money?" and examines the evolving job market for graduates.