The modern American student loan crisis is in the news daily. We regularly hear statistics like:
- Student debt has increased 500 percent since 1999
- Federal student loans’ interest rates have doubled in recent years
- The average graduate owes at least $33,000 in debt, but at least 15 percent of graduates face debt in the six-figures
- Salaries for entry-level positions continue to drop about 2 percent every year
With all this bad news, the idea of seeking higher education — including advanced degrees — seems idiotic. What’s more, the Web is becoming a treasure trove of information, allowing knowledge seekers to gain proficiency at virtually no cost. Is a university degree really worth that much in the digital age?
In a word: yes. Though the Internet harbors 1.2 Zettabytes of data, its mutability muddles its reliability. Even during a time of crippling student debt, the old belief holds true: knowledge is power. However, the only way to ensure your knowledge is correct is to return to school.
So, how does a Bigger Pockets member take advantage of the financial freedom offered by education without accruing several lifetimes of debt? Read on to find out more.
The Current Student Loan Crisis
Not all reports on student loans accurately explain how and why the crisis came about. Most people are quick to point the finger to rising tuition rates. Indeed, the higher costs of schooling have caused many students to seek loans and have also impacted the way indebted students have paid off their loans. However, inflation is raising prices across the board, and higher tuition is not the sole cause of the crisis. In fact, the number of active borrowers of student loans is decreasing (from 12 million students in 2010 to 9 million students today) even as more people return to school.
The probable cause of the student loan problem is the 2008 financial crisis. Due to the poor economy during the Great Recession, many graduates have struggled to make adequate repayments. Defaulting in this way caused borrowers to increase the country’s aggregate outstanding debt higher, inflating the numbers and making the crisis appear untenable.
Fortunately, many studies indicate that the student loan crisis is drawing to a close. Current student borrowers are not defaulting at the same dangerously high rates as those who took out loans during the financial crisis and Great Recession. Instead, healthy historical trends are starting to appear, and any continued trouble with student debt arises from borrowers who were never able to recover after 2008. Essentially, this means future students shouldn’t fear a lifetime of debt after getting an advanced education.
Degrees That Make Bigger Pockets
Of course, it doesn’t hurt to seek advancement in a field that pays well. Some degree programs will make it a struggle to earn deep pockets no matter how many loans students took out. Here are a handful of advanced degrees that will pay off in the long run:
- Master of Science in Information Systems. IT has become the backbone of modern business, and employees who have in-depth knowledge of development and maintenance of business systems. A Master in Information Systems typically earns a mid-career salary of about $101,000.
- Master of Science in Electrical Engineering. The expectations from electrical engineers continue to change as technology changes; thus, it is more important than ever for electrical engineers to continue their education. An electrical engineer with a master’s earns an average mid-career salary of $124,000.
- Master of Science in Finance. Few entrepreneurs will get far in business without a strong command of their finances. Finance master’s provide advanced expertise in business strategy. The mid-career salary for a Master in Finance is about $107,000.
- Master of Science in Nursing. Few jobs provide more satisfaction and less schooling than nursing. However, to increase earnings, nurses can return for a master’s degree for a mid-career salary of around $90,000. With increased schooling, such as through accelerated DNP programs, there may be the option to earn even more.
Debt-Free Degree Plans
Funding higher education can be as time- and energy-consuming as funding a new business venture — but ultimately, leaving school without the burden of debt is well worth the effort. Unsurprisingly, there are quite a few ways students can fund their academic aspirations without turning to the bank.
Scholarships and grants are obvious choices, and there are hundreds of online searches to help students find gift money that applies to them. Less attractive options are those that require extra work in addition to extra education; teaching assistantships or part-time jobs are common enough, but working and going to school can be tough to balance. Perhaps the best option is to find programs without big price tags: One-year master’s degrees, online courses, and public schools offer significant discounts and often more flexibility for students eager to get back to work.