Americans will have approximately $2 trillion worth of student loan debt by 2022, according to a according to a report by The Institute for College Access & Success. It didn’t seem too long ago that we as a country were holding our collective breath and proclaiming the end times, as student loan debt crossed the $1 trillion mark in 2012. We are about to add another trillion dollars in student debt over a 10 year period, which roughly equates to a yearly increase of 7.2% per year (thank you “rule of 72”). It is obvious that the country’s problems with student debt largely originate with credential-ism, easy access to loans and other societal factors that are grossly out of almost everyone’s control on an individual level. But, being the positive, frugal fools that we are, we have to ask ourselves, “how can I reduce my dependence on student loans in order to actually have a career?”
The first thing that I would suggest is to spend the first two years of your college experience at a community college. It’s no secret that college pack the first two years with “filler classes” that really add no value to your degree and only seem to be in place to pad out the wallets of the school administration. My suggestion is to take these classes (English 101 is the same across all higher education) at a cheaper community college. On a per credit basis the average state school is about $325 per credit and the average per credit cost of a 2 year public school (what most would consider to be a community college) is about $125 per credit (both numbers came from Student Loan Hero). That’s a savings of $200 per credit. Now lets say the average course load is 14 credits, times 4 semesters, over the course of those first two years you would save roughly $11,200 in tuition alone! Not to mention that community colleges are almost everywhere, which means there is a higher likely hood you can live at home while attending college, leading to even more cost savings.
But perhaps you want to earn while you’re going to school? Or maybe you’ve never been much of a book worm? Despite what many young people are told by well to do “professional office workers”, being in the trades does not make you a “loser”. In fact in the early stages of a career an electrician or a plumber can out earn most office workers (such as those in administration or even some engineers). Also going to trade school is much faster as well as cheaper. For example an electrician would normally go to school for 9 months, that’s it, just nine months. However they will have to be an apprentice electrician, but the great thing is that they are being paid to learn for the 5 or so years it takes to move from apprentice to journeyman.
And as a journey man an electrician could expect to earn $25.50 per hour. Which isn’t Earth shattering but pretty good considering Electrician school is only 9 months in length.
Of course perhaps the real answer is to do some reflection and decide, if, for one “Is my degree in demand?” and “Do I really need a degree to do this?”. I personally believe more and more people are asking these two, key questions, leading to more people enter the STEM (Science, Technology, Engineering and Math for the uninitiated) fields, leading to much higher salaries later on down the line. Of course as we are acutely aware in the financial independence community, you’ll never get rich working for someone else, so perhaps entrepreneurship is really more your jam. But be warned going this route has an incredibly high failure rate and it sure as shit isn’t easy, but neither is paying tens of thousands in student loans.
In conclusion, I believe that academic advisers and society in general are asking a lot of great questions regarding the ballooning student debt we hear about on an almost daily basis. However, there are steps that people can take to minimize costs, besides getting a job. One of these alternatives is going into the trades, or perhaps getting into entrepreneurship. Either way like most things, good planning can really clear up a lot of stress and confusion.