36% of Graduates Say College Wasn’t Worth the Debt
Inside Subprime: April 24, 2019
By Lindsay Frankel
More than half of young adults who attended college went into debt to finance their education, according to The Federal Reserve. And a new report by Merrill Lynch and Age Wave found that 36 percent of surveyed adults ages 18-34 believe the student debt they took on to go to college wasn’t worth it.
As reported by AOL Finance, a recent poll revealed similar results; 42 percent reported that their college degrees didn’t justify the amount of debt they incurred, even if 88 percent said they didn’t regret the decision to attend college altogether.
Americans now carry a collective amount of student loan debt in excess of $1.5 trillion. CNBC Make It reports that graduating seniors making an average starting salary will end up putting as much as 9% of their pre-tax salary towards student loan repayment, or $371 per month over the course of 10 years.
Many college graduates find themselves in a state of financial fragility years after leaving college due to student loan debt. The Federal Reserve even found that debt from student loans played an important role in the decline of home ownership. Younger adults are waiting longer to buy homes and start families because they are saddled with debt.
The stress of student loan repayment has made many question the worth of a college degree. Self-made millionaire Grant Cardone even went so far as to claim that “Most people should not be going to college.”
But while financial hardship after college can make a bachelor’s degree seem less valuable, research shows that graduating from college sets adults up for a healthier financial future in the long run. Research from Pew Charitable Trusts illustrates the difference in income between college graduates and those who only finished high school, revealing that earnings for adults ages 25-37 have only increased for those who graduated college.
Data from the U.S. Census Bureau revealed similar results; college-educated Americans earned $29,867 more on average in 2016 than those who only received a high school diploma. And the long term results of getting a bachelor’s degree are even more striking. Studies estimate that adults who graduated college will make an average of $1 million more in income over the course of their lifetimes, and they’re much less likely to find themselves unemployed as well.
Student loan debt is considered a responsible form of debt because it leads to greater income over the course of a career. The average balance for adults ages 18 to 34 is less than $37,000, which most experts say is an appropriate amount of debt to take on for the purpose of getting an education.
“Given the modest levels of student debt that the typical millennial grad is taking on, it still looks like college is working out pretty well for them,” Richard Fry, a senior researcher at Pew Research Center, told CNBC Make It.