From the time you were in elementary or middle school, your teachers might have emphasized the value of a college degree, and when discussing the future with your parents, going to college might have been the rule, not the exception.
Higher education is considered very important in terms of gaining valuable work skills and increasing earning potential. And if you have big plans for your life, such as a cushy salary and a corporate career, you may view education as a steppingstone to a better quality of life—which isn’t far from the truth.
Research proves college graduates earn on average about $1 million more over their lifetime than employees with only a high school diploma. And according to some studies, people who attend some form of college tend to be more satisfied with their careers and daily life.
But while there are undeniable social and economic benefits of a college education, there’s also an ugly side to higher education, so it’s important to have realistic expectations about life after graduation.
Student Loan Debt Is Crushing
Most college students don’t have a silver spoon or a university giving them a free ride. They’re responsible for covering the cost of their own education, which often translates into getting private and federal student loans.
College is an investment in your future, but unfortunately, the quest for a better quality of life isn’t cheap. Even if you mentally prepare for student debt after graduation, and you feel it’s a fair trade off for gaining skills needed to jump-start a career and get ahead, the amount you end up owing after four or five years could be more than you ever imagined.
“Going to college is a major financial decision, and the reality is that a poor decision can impact a person’s life for years,” says Mary Johnson, student aid policy and financial literacy expert. “It’s so important for students and their families to have a frank discussion about cost and affordability.”
The average student loan debt increases with each graduating class. The average grad in 2015 left college owing a little more than $35,000, whereas the class before graduated owing an average of $33,000. The amount of debt accumulated during your college career depends on several factors, such as whether you live on campus or at home; attend a state school or an out-of-state school; go to a private university or a public university; and whether you change your major halfway through the four years.
A Job in Your Field Isn’t Guaranteed
After spending thousands of dollars on a college degree, graduating with honors, and gaining work experience while in school, you think you’d be able to graduate and land a job within a couple months. But this doesn’t always happen.
Some college graduates find themselves with a lot of education and very few job prospects in their fields. “While graduates today are more likely to get jobs, they’re unlikely to get a job that they are qualified for or in their area of expertise,” explains Kevin Scott, an Atlanta-based consultant with the Addo Institute. “Because it’s such a buyer’s market for employers, they get graduates who will work for less money and for more hours.”
If unable to find suitable work, the only option might be taking a job outside your field or working in a field that doesn’t require advance education. According to a 2013 survey conducted by the consulting firm McKinsey, “nearly half of graduates from four-year colleges are in jobs that don’t require a four-year degree.”
It Can Take Longer than Four Years to Finish
In a perfect world, we would all graduate college in four years, which would put us on track to receive a bachelor’s degree around the age of 22. But life can get in the way of our plans, and finishing a degree can take longer than expected. Or worse, you might never finish your degree.
“Going to college doesn’t equal graduating from college,” explains Sean Moore, CFP with SMART College Funding. “More than 40 percent of students that enter college will not have graduated six years later.”
Unfortunately, the decision to stop your college career doesn’t mean you’re off the hook with regard to repaying student loans. You have to pay back every cent you borrow from a federal or private lender. Since tuition and books can cost thousands each semester, you could end up with massive student debt and no degree to show for it.
Student Loan Debt Can Delay Life Plans
Graduating college and finding a job doesn’t necessarily mean a happy ending. Once college debt repayment kicks in, you may come to the sad realization that monthly student loan payments prevent moving forward with your life and taking big steps.
You might be ready to get married, buy a house, and start a family after finishing school, yet the cost of paying back educational loans can derail your plans. Monthly student loan payments can raise your debt-to-income ratio, making it harder to qualify for a mortgage, or it can reduce the amount you’re approved for. And when student loan payments takes a huge bite out of your income, you might even rethink starting a family—at least for now. You may lack disposable income for child care, health insurance, and other needs.
College Might Not Prepare You for Life on the Job
A college degree can provide academic skills to get the job done, but it may not provide the “life skills” you need to succeed. The McKinsey survey found “about one in three graduates do not feel college prepared them well for the world of work.”
According to the survey, respondents felt unprepared in various areas related to their job, such as leadership, technical skills, oral communication, teamwork, and project management. Visual and performing arts and liberal arts majors felt the most unprepared.
Interestingly enough, feelings of unpreparedness had a lot to do with whether a student gained work experience while in school, such as a part-time job or an internship. Among students who worked while in college, about 77 percent felt they were prepared for the workforce.