As Sen. Dick Durbin (D-Ill.) and lawmakers reintroduced the Know Before You Owe Act and Fairness for Struggling Students Act of 2013 last week, we’re once again reminded that rising tuition costs, increased student debt and cuts to state education funding prompt college students to re-examine the return on investment of higher education.
For some students, the option of an associate’s degree could be an economical solution that leads to successful careers.
A recent study by NerdScholar, an organization that works to inform students and parents about higher-education choices, found that with just two years of school, students could earn 40% more and pay back tuition in just two years.
The top jobs requiring an associate’s degree by growth rate and median pay were registered nurses, medical sonographers and dental hygienists with median annual pay of $64,690, $64,380, and $68,250 respectively. Additionally, these jobs have between a 28%-44% projected growth rate by 2020. It seems that associate’s degrees can lead to higher earnings in certain fields.
A recent report by analytics company FICO found that just in the past seven years, student debt has risen 58%. Regardless of focusing on student debt or lowering tuition costs, students have to think much more carefully today about how much their degree costs, how it will help them build sustainable careers with growth opportunities and if it will allow them pay back student loans.
In other words, students can no longer just assume that those student loans will pay themselves off after college. NerdScholar’s study, which aggregated all high-growth jobs, found that occupations requiring an associate’s degree had the highest average growth and quickest pay-back period. The Bureau of Labor Statistics predicts the average growth rate of all jobs between 2010 and 2020 to be 14.3% — compare that with jobs requiring an associate’s degree, which have an average a growth of 35%.
While most of these high-growth jobs are in the health-care field and not for everyone, it is still a valuable model of how students should think about making their higher education investments. Students own their education and should take more time to evaluate what the ticket price of their education is, what scholarships and federal aid they can maximize and what return they will get on their investment before signing any promissory notes.
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