Many are horrified at the amount of student debt burdening college grads today– it’s not unusual for a student at a public university in Iowa to borrow $28,000 or more. And how will they ever repay that loan if the economy won’t cooperate and provide good jobs?
Before we bail out today’s borrowers, let’s compare their plight to those student borrowers before them and how they handled their educational goals and loans. For example, let’s consider an in-state student graduating with a B.S. from a four-year public university in Iowa.
About 40 years ago…
In 1975, the cost to attend college in Iowa averaged about $1560/year (and fees skyrocketed the next year to a whopping $2600). Some students had $2-3000 in loans, or roughly 1/4th their cost to earn a bachelors degree in four years.
At that time, the starting job for a typical college grad paid under $10,000/year, and the high end of the job scale would offer 20-25% more, typically for engineers. By comparison, summer jobs for most teens meant roughly $2/hour. The minimum wage was $2.30, except for farm workers, who got $1.60 minimum.
Though several major Iowa corporations had hiring freezes, graduates could find employment somewhere, albeit not the jobs of their dreams nor for top-dollar salaries. Most took the job anyway.
About 30 years ago…
In 1985, the cost to attend a pubic university and earn the same B.S. degree was about $10,841/year. I know students who borrowed $10-12,000, or roughly 1/4th the cost to attend college for four years.
Comparatively, the starting job for a 1986 grad with a B.S. was just over $15,000, and new engineers would earn about $20,000/year. By comparison, teens would have earned about $3/hour at summer jobs. The minimum wage was $3.35.
Though Iowa was suffering through a severe farm crisis and recession was pending, graduates found jobs somehow, although many settled for less than the job (and salary) of their dreams. But..they took the job anyway.
As for recent grads…
In 2012, the cost to attend a public university and earn the same bachelors degree was about $16,500/year.
Statistics show that undergraduates attending Iowa’s public universities borrow more than average, taking on about $27,000 in student loans. It appears this is roughly 1/4th the cost for a student to earn a degree (which typically takes five years not four, and includes opportunities for leadership experiences on campus, studying abroad, taking unpaid internships, building well-rounded resumes, etc.)
Comparatively, starting jobs for 2012 graduates could be found for $45-50,000/year, and new engineers could earn $65,000/year. Likewise, summer jobs for teens meant about $7-8/hour, and the minimum wage was $7.25.
Though many complain that no jobs exist for them, there are companies that want to hire but can’t fill positions. Some grads are taking those jobs anyway, realizing that maybe they haven’t reached the pinnacle of their career yet and that their dream job (and salary) may come a few years down the road.
–yes, college costs have risen.
–yes, the amount students borrow is more.
–yes, students take longer to finish college.
–yes, many students give up paying summer jobs for unpaid college experiences.
YET, grads borrow and have about the same percentage of college costs to pay back as ever- about 1/4th the cost of a bachelor’s degree.
AND, while some grads will snag their dream job right away, others realize that, like their predecessors, they should get out there and get working.
Begin with the end in mind.