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Investing In Yourself – The Real Cost of Higher Education

The following is a guest post. Enjoy!

Millennials are a generation scared of school. Many 20-30 year olds are straddled with tens of thousands in school debt, working jobs that they could have acquired with no higher education at all. Even those employed in fields related to their chosen major may tend to scorn their diplomas more than generations past. But the statistics don’t support this attitude. For many recent grads, higher education simply hasn’t paid off…yet.

According to the statisticians at the Hamilton Project, college grads simply don’t achieve great salaries in the first years after graduation. In fact, salaries don’t peak until 26 years after entering the workforce. At this age, high school graduate workers have yet to achieve the highest pay of their career. Theirs doesn’t reach its apex until nearly 30 years are spent working hard in their field.

Peak salary for college graduates is nearly double that of high school graduates. Of course, this is when all majors are considered. Some will earn  much more or less than the height of $63,000 yearly that the median college grad makes in his or her career. As you might expect, an engineering student will make well more than the average lifetime salary of all majors. But what about our friends the English majors? Even students like this, with majors considered to be “less marketable” than others, still earn between $10 and $20k more than their high school grad peers, every year of their working lives.

All this considered, a college education is still a good investment for most students. Of course it is still possible for a hardworking individual to achieve great success with no university training at all.. But by selecting a path of study with somewhat predictable earnings, most students can chart a course for real success that would otherwise be unattainable.

This is still considering student loans. Even when saddled with 10, 20, $50,000 in loans, the higher lifetime earnings made possible by the education they finance, student loans are worth the cost. Their weight is felt most severely by the recent graduate, the individual who has yet to see the payoff of their education in terms of a decent salary. With interest rates between 3 and 5%, these students are still paying the least interest available on nearly any kind of loan. For those with in the $10-$20k loan range, it isn’t unreasonable to pay them off in full in 5-7 years, with a normal job.

In fact, private student loans can be an excellent motivator. When I was still paying off my own, I thought of them as a mountain I had to burrow through. My happiness was on the other side of the mountain, and nothing would stop me getting through it. I managed to make my finances efficient to the point where I was paying over $600 a month, and my loans were gone in 3 years. Now that I’m in the habit of saving $600 a month, I’ve been putting that money into savings and investments. I’ve maxed out my IRA two years in a row, in just 5 and 9 months. The extra money goes into my mortgage and home renovations. I used to complain about the limitations my education put on my career options. But then I figured out how to leverage the education I had. For recent grads and those considering college, I suggest you do the same. It can work.


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My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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