Americans continue to find less value in a college degree. However, they appear to think it’s acceptable to take on more debt to earn one. According to a new COUNTRY Financial Security Index ®survey, the number of adults who think college is a good investment dropped to 57 percent, down from 81 percent in 2008. Nevertheless, four in ten (42 percent) said more than $20,000 is an acceptable amount of student loan debt to take on in pursuit of a college degree.
When asked how much student loan debt is too much, Americans were more tolerant of higher loan amounts. The shift suggests people now have a higher threshold for what they consider acceptable student loan debt. This trend might also be because 62 percent prioritized the quality of the education over the cost when evaluating colleges.
How Much Student Loan Debt is Too Much?
|
How Much Student Loan Debt is Too Much? |
2012 |
2011 |
|
Less than $20K |
50% |
61% |
|
$20K and above |
42% |
31% |
“Even with the cost of college rising faster than inflation, a college degree is more valuable than ever. And, an aggressive plan for funding your child’s education can help eliminate the burden of unmanageable student loan debt,” said Joe Buhrmann, manager of financial security support at COUNTRY Financial. “So, start saving early and investigate all your funding avenues and alternative options, such as community college or working part-time.”
Who foots the bill?
The cost of obtaining a college degree may be having an impact on both young adults and their parents. Eighty percent of Americans said parents should be responsible for paying at least part of their child’s college education. A majority (57 percent) say half or less of their child’s college costs will be funded by student loans. Meanwhile, many adults are prioritizing retirement savings (45 percent) over college savings (38 percent).
“It’s encouraging many Americans are focusing on retirement and are still willing to help their kids with the cost of college. However, saving for both can be challenging,” added Buhrmann. “Parents and their children should work together to decide how much they should realistically borrow for college and see how each can contribute. Planning and consulting a knowledgeable professional can help you balance both of these needs.”
Additional Resource
- For more insight on this survey and Index updates throughout the month, follow @FinanceSecure on Twitter.
The COUNTRY survey on college is based on a national telephone and online survey of 3,000 Americans and is compiled by Rasmussen Reports, LLC (www.rasmussenreports.com), an independent research firm.
College is absolutely a good investment, particularly if you are headed in a professional direction. That said, I think for young people who simply go to college because “I’m supposed to” or “all my friends are going”, etc., they should consider waiting a year or two and gain some maturity or consider attending a technical school instead. Not every needs to attend college. We are in sore need of good trained technicians and those with mechanical skills.
Maybe it is time we admit the fact that not everyone should go to college and that those that do should go to learn something as opposed to partying.
With the Internet and all of the information contained within it, one can learn just about anything. You can even get a college degree online at a greatly reduced investment. Of course you will miss out on all of the socializing, but that is not what higher education should be about.
It is time to think outside the box and know what you want in life and then map out a process to get it and going to college may not be the answer for you.
This article makes me realize how comfortable most folks have gotten with debt. What a shame that so many young people graduate and are already that far in the hole. Worse, many are focused on a piece of paper and expect employment to follow – when that just isn’t how it works anymore.
Just because a lot of people say that more than 20k of student loan debt is okay, it doesn’t make it okay. The goal should be $0. If you don’t know what you want to study, take some time to figure it out first instead of spending 20k a year to flounder. If your parent can’t pay for it (and by the way, they don’t owe you a college education – especially at the expense of their retirement) then get a job (or two), get intense, and save up. Pay as you go… I’d rather graduate two years later with no debt than with a mountain of it.