Placing a value on your college degree

Tina Haapala |

By DaNella Organ

The cost of a college degree has been on the rise in the last few decades.  The average annual growth of college tuition has more than doubled the increase in inflation.  Sadly, wages and income levels are not growing at the pace of college tuition, either.  This is a big part of the reason Americans have more than $1.2 trillion in student loan debt.  Even worse is the average time to pay off these loans: 21 years! With decades of enormous debt being the norm, how can you make sure the investment is worth the cost? I asked our Research Director, DaNella Organ, to help answer that question. Following is her report.

First, guide students in the first years of high school to think about their career paths. Guidance counselors, career centers, and local universities can help your student direct their passion toward a future career.  Students can take a summer class at a community college or seek out an internship to better gauge whether a certain career field is a good fit. Gather data on starting salary, required degrees, and geographical location for the chosen career field. With a general idea of a career in mind, the college selection process begins.  

The next step is to research the total costs associated with the student's favorite colleges and universities (one online reference is  Make note of the costs of the favorites while researching a few lower cost options. In general, students should aim to borrow no more than half of their starting salary.  So, if the career path they have chosen has a $40,000 starting salary, their total student loan debt should be less than $20,000 after four years.  The financial aid process is complicated but keeping “half of the starting salary” guideline will help when analyzing financial aid packages from different universities.  Remember that, while financial aid is based on need, if you cover that need with a loan it becomes debt. The bottom line is to focus on the total debt that must be repaid.

In that same vein, the most important step is to start working toward a plan to cover all the costs. Don't forget to add in anticipated scholarships, after– school jobs, and 529 plans. Then in the beginning of the student’s senior year, compare the costs of each university by discussing financial aid packages with the top choices. The idea is to educate yourself and your student on both the cost of their degree and its earning potential for them.

In the end, the amount of money spent on a college degree is an investment.  You have to determine if the future payoff is worth the debt and the time it will take to pay it off.  By taking on appropriate debt based on future earnings, your student's degree will offer a positive return on investment. 

And to any students who might be reading this, please finish your degree! Student loans must be paid back whether you complete your degree or not. Stay focused on your goal and a rewarding career in your future.

This article was published in the Wichita Falls Times Record News on June 5, 2016.