We have finished another school year with over 3 million high school graduates. Congratulations! Seventy percent will go on to a four-year college, even though according to the Bureau of Labor Statistics (BLS), only 27% of the jobs created through 2022 will require a four-year degree and 70% of all new Wisconsin jobs being created will only require a high school degree, according to the University of Wisconsin-Milwaukee Skills Gap Report. Based on the BLS data, National Public Radio (NPR) makes the "tongue in cheek" analogy that you could close every two and four-year College for 10 years and still meet the industry demand for college graduates.
Nineteen percent of these new high school graduates will finish their four-year degree in four years. Congratulations! Thirty-nine percent more will complete that four-year degree in six years. For the rest, life just goes on. Of those who do graduate, only about 30% will find jobs in their field do to a job market saturated with previous college graduates. Are we over-educated? Are we just choosing degrees that do not equate to a job after graduation? Or, do we just not understand our options?
College graduates will have an average student loan debt of $30-50,000 depending on which completion plan they were on, with many having student loan balances in the hundreds of thousands of dollars. Total student loan debt is $1.3 trillion today and rising $3.300 every second. Congratulations! Did you know that higher education was a one-half trillion dollar industry? Paying back your federal student loan starts six months after graduation and has two options: 1) monthly payments over 10-25 years or 2) death.
There were over two million college graduates this year. Congratulations! Twenty one percent had jobs when they graduated with an average salary of $40,000, or about $20 per hour. Congratulations? That is until the minimum wage moves to $15.00 per hour, then the whole return on investment college argument becomes suspect. Thirty nine percent took jobs that did not require a college degree even though they just spent four to six years of their lives and $30-50,000 getting one. Can you spell barista? For the other 40%, life just goes on.
Today, in the United States, there are more 18-34 year olds living at home than at any time since 1880. Congratulations! This makes perfect sense. A college graduate earns $40,000, Uncle Sam takes 25%, and the average monthly expenses for a 20-something living alone is about $2,600. Ouch, we are in negative territory. Let us look at all millennials. The average salary is $27,000, Uncle Sam takes 15%, and the expenses are still about $2,600. Even more negative! Pretty tough to stay out of the red being a single college graduate or millennial. Note to parents: make sure you save a room at the inn.
The PayScale Website points out that many careers we assume require a four-year college degree can actually be started with a two-year degree. The break-even earnings point for students pursuing this career pathway is about 10 years. You say sure, but after 10 years the four-year college grad will earn more, right? Nope. I forgot to mention that after two years on the job the two-year graduate went back to college using tuition reimbursement from the employer and earned a four-year degree. With the gained experience, four-year degree, and no student loan debt, the two-year career pathway choice was the best value with greater lifetime earnings.