Photo by Vasily Koloda on Unsplash

Four in ten recent college graduates are working jobs that do not require their degree. Student loan debt in the United States is now over $1.3 trillion. According to research done by the New York Federal Reserve Bank, twenty percent of those still paying off student debt are behind on their payments. WHAT?!

I graduated from college in 2013 with roughly $25,000 in student loans courtesy of good old Uncle Sam. College was never something forced on us, but it was certainly part of the discussion as my siblings and I each approached high school graduation. My father is nothing if not blunt, but bless his heart, he was not about to let his children take on thousands of dollars in debt to earn a “useless degree.” Nope, if college was part of the plan, the income stream after college had to be a bigger part. Much to his credit, one of his children rightfully chose the workforce and the other three earned degrees that led to jobs that would “pay the bill.” I assumed that conversation took place for everyone, whether it be at the dinner table, a school counselor’s office, somewhere, anywhere! But if that conversation really is happening with all upcoming high school graduates, why are 40% of college grads not using their degree?

The Federal Reserve Bank of New York recently posted data for unemployment rate and wages earned by college major. With a current unemployment rate in the United States of about 3.7% (Bureau of Labor Statistics), a student considering a Liberal Arts degree should know that the graduate unemployment rate in said field is 6.7% and the median wage earned early in their career is $33,400. They should also know that the current poverty line for a four-person household is $25,750. Do they really want to go $20,000-$25,000 in debt (the typical amount of education debt in 2018 according to the Federal Reserve) to get that degree? The National Center for Education Statistics shows that, in 2016, 43,661 people answered “yes” to that question. Nursing, on the other hand, has a 2.0% unemployment rate and a median starting wage of $50,000.

Now, unemployment numbers are one thing, but in this particular situation, underemployment rates may speak more to the point. The underemployment rate represents the percentage of people who are not working to their full capacity, whether it be they are not using their skills (degree) or only working part-time hours when they would prefer full-time. For example, the underemployment rate for the numerous engineering fields ranges anywhere from 17-27% (Federal Reserve Bank of New York). The underemployment rate for General Business on the other hand, is well over 50%. In 2016, 371,694 people earned business degrees (NCES). This data suggests less than half of those people are using their degrees to their full capacity. So, are colleges over promising results to their students? Are there some college degrees that should be left in the past?

I recently had the pleasure of attending a presentation by the superintendent of the Billing’s Public School District. The statistics he spouted off were eye opening. Roughly 40% of high school graduates are pursuing college and of that 40% only about half actually earn a degree. This creates 3 segments of high school graduates, those who immediately enter the workforce, those who pursue college but do not complete a degree and those who earn a college degree. High school curriculums and the high school counselor’s guidance are geared towards college bound students, forcing 4 years of English and 1 year of geometry (which are required for college acceptance), but not a single finance or economics course. This is one of VERY few instances where we are catering to the few rather than the many. So, we know the college conversation is happening in the schools at some level. But then why are only half the students who start college actually completing it? Is the direction of that conversation wrong? Why are so many students taking on debt unnecessarily? With the cost of tuition up well over 1,000% in the past 40 years (Labor Department), are there students who should be encouraged to seek alternative education and training?

Let’s recap what we know. High school curriculums are geared towards college bound students. There are a lot of high school graduates pursuing college only to leave without completing a degree. The cost of said degree has increased by more than four times the standard inflation rate since the 1970s. Roughly 20% of those with student debt cannot afford their payments. A significant number of degrees offered by public colleges have unemployment and underemployment rates well above the national number. What are we doing wrong?

Now, I could talk for hours about the scam that is federal student loans, but rather than trying to change our government (God knows that probably isn’t happening anytime soon) maybe we should educate our students on the costs and benefits associated with a college degree. As parents, educators, and just simply as citizens who want better for future generations, let’s teach students to weigh the cost of higher education before we encourage them to take on thousands of dollars in debt. There are certainly some fields that will always require higher education and rightfully so. I don’t want my surgeon toting his high school diploma as his highest level of education. But should an 18-year-old be encouraged to take on $25,000 in student debt to earn a degree in sociology when that particular field has an underemployment rate of 56%? Our students deserve better. If you are a parent, grandparent or loved one of a high school student, I want to encourage you to start the change at your own table. Ask your high schoolers about their plans for after graduation. Listen first, then offer advice. We need to help shift the college conversation from passion to productivity. I recently spoke to a local high school’s business classes about what I do. After class a young lady approached me with a few questions about college majors. I started to say “when you’re considering a college degree be sure…” and before I could finish, she interrupted with, “I know I know, don’t think about the money, think about what you want to do.” No No No! I was about to say the exact opposite. While I wish we could all spend our days just “doing what we love,” that’s not what moves an economy forward and it certainly isn’t what pays the bills. But that is the message these high school students are getting; earn a degree of passion. We need to help curve that message. Rather than encouraging a creative to get a degree in art history, what if she was instead encouraged to earn a two-year degree in digital marketing. If we can help students find a way to make money doing what they love, we kill two birds with one stone. But at the very least, let’s not encourage them to take on massive amounts of debt to earn a degree they may never be able to use. Furthermore, help your student understand debt by welcoming them into your financial world, even just a little bit. Prior to student loans, most young adults have never encountered debt, especially on this level. It’s our job to teach them about it before they accept it. One day when our children are considering college, my husband and I will most certainly be talking to them about the 5 years we spent paying off our student loans after getting married. It was grueling and it meant we said ‘no’ to a lot of things we wanted. We would both agree that our degrees were well worth the money, but that’s what we need to teach them to weigh. Help them research the unemployment, underemployment and median wage for the degree they are considering. It’s not about discouraging college, but rather equipping our students with all the information they need to make the best possible decisions for their futures.

So, is college still the best way to the American dream? For some, sure. But what about the many? With college rapidly pricing itself out of the market, not only should we be encouraging students to seek alternatives to the traditional route, we owe it to future generations to warn them of the dangers of massive debt. ESPECIALLY if that debt does not lead to a productive end. There will always be a place for college in our society. There are certain fields that rightfully require higher education. But for the vast majority of our students, let’s do better. Let’s stop encouraging degrees with 50% underemployment rates. Rather than pushing the 18-year-old who is on the fence about college to “get his generals” let’s push him towards trade options or the work force. College will always be there to return to, but you can’t easily undo years of worthless debt. Instead of encouraging our students to participate in our $1.3 trillion student loan problem, let’s help them explore other roads to the American dream. Besides, I highly doubt $25,000 of debt is anyone’s idea of a dream come true.

Opinions expressed are those of Molly VanBinsbergen and are not necessarily those of Raymond James. All opinions are as of this 12/10/19 and are subject change without notice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.