Is a Bachelor’s Degree Worth Going into Debt?

For years now, there’s been controversy surrounding the value of a college degree, particularly the quintessential four-year bachelor’s degree credential. As tuition rates rise, many would-be students wonder whether or not the exorbitant costs of higher education will actually benefit them down the line. It’s a valid concern. Total student debt in the United States has reached staggering figures, and many students find themselves unable to pay back their debt after graduation. To avoid becoming one of these statistics, it’s important to know exactly what you’re getting into when enrolling in a four-year degree program and signing that promissory note. In this article, we’ll take a numbers-based approach to the issue of paying for a college education with student loans, attempting to answer the fundamental question: Is a bachelor’s degree worth going into debt? Along the way, we’ll also provide some additional information regarding student loan repayment, unemployment risks, and high/low-paying jobs with a college degree. Let’s dig in.

Student Loan Debt in America: The Frightening Facts

Starting with the elephant in the room, let’s talk student loan numbers. Everyone likes to talk about the benefits of a bachelor’s degree until the topic of student debt comes up. While there’s really no reason not to get your four-year degree if it’s paid for by scholarships and grants, the issue becomes much more complex when you factor in the reality of taking out loans to fund your education. According to U.S. News & World Report, the average student loan debt for recent college graduates in the United States is almost $30,000 per borrower.  In sum, student loan debt in America exceeds $1.75 trillion. That’s a lot of student loans!

Taking on student loans is a frightening prospect for many prospective students. After all, signing on to such a huge bill before knowing exactly how you will pay it is a risk. The question is—is it a risk worth taking?

Dodging Unemployment with a Bachelor’s Degree

Perhaps the only thing scarier than taking on a mountain of student debt is joining the millions of Americans in the unemployment line. According to the latest data available, there are nearly 7 million individuals across the country without a job of any kind. While there’s no surefire way to avoid being unemployed, one of the best ways to escape this situation is to become more employable through education and training. The Bureau of Labor Statistics has collected and analyzed data regarding the educational attainment of unemployed individuals in America. This information can prove quite useful to those individuals contemplating higher education in today’s economy.

Some of the most important employment numbers for individuals considering postsecondary education are those statistics regarding unemployed persons with and without a degree. According to the BLS, the Americans most likely to find themselves unemployed are those without a high school diploma. The rate of unemployment amongst these individuals was over 5% in 2019. When looking at the remaining data in the publication, though, the clear takeaway is that the more formal education an individual has, the less likely he or she is to be without a job. For future college students contemplating a bachelor’s degree, the numbers are very encouraging; the unemployment rate for individuals drops to just 2.2% after receiving a four-year credential. After that, the higher the degree you attain, the lower the unemployment risk. Thus, if you’re worried about not being able to pay on your student loans after you graduate from a bachelor’s degree program, you can rest assured that this is an unlikely (though not impossible) scenario.

Bachelor’s Degree Wages: What You Can Expect to Earn

While your fears of unemployment with a bachelor’s degree may be somewhat unfounded, there’s still the issue of post-graduation earnings to be concerned with. Specifically, you may be asking yourself, “Will I make enough to pay off my student debt in a reasonable amount of time?” To help address this question, let’s dig into the salary projections for four-year degree-holders. In order to determine whether or not pursuing a bachelor’s degree program will be worth your while (and your dollar), you’ll need to try and predict your future salary. A word of forewarning, here though: It’s important that you go into this process with eyes wide open, knowing that there are no guarantees. No matter what college you attend or what degree program you pursue, your wages can vary significantly across employers, locations, and job titles. Still, researching typical earnings for individuals with a bachelor’s credential can give you a rough idea of what your financial situation will be upon college graduation.

According to 2019 data from the United States Department of Labor, Americans with a four-year degree make $1,248 per week on average. That amounts to nearly $65,000 per year. On the other hand, individuals with just a high school diploma make less than $750 a week or $39,000 per year.

Highest-Paying Bachelor’s Degree Jobs

To get an even better idea of what you’ll make after graduating from a four-year degree program, you may want to consider your major. Not all bachelor’s degrees hold the same value, so if your future salary is a top priority, you’d be wise to learn about the fields associated with higher earnings. According to the Bureau of Labor Statistics (BLS), these are some of the bachelor’s-level job titles that pay the most (along with their median annual wages as of 2020):

  • Airline and Commercial Pilots: $130,440
  • Computer and Information Systems Managers: $151,150
  • Marketing Managers: $141,490
  • Financial Managers: $134,180
  • Aerospace Engineers: $118,610
  • Software Developers, Quality Assurance Analysts, and Testers: $110,140
  • Actuaries: $111,030

Keep in mind that these averages represent a range of experience levels, so you may not start out making quite as much, or you could end up making significantly more.

Lowest-Paying Bachelor’s Degree Jobs

While there are many academic majors that lead to high-paying jobs, there are others that aren’t so desirable, at least in terms of financial success. If you’re concerned with being financially stable enough after graduation to start making regular student loan payments, then these are some of the career paths you might want to avoid—or at the very least, reconsider—along with their 2020 median salaries:

  • Graphic Designers: $53,380
  • Fundraisers: $59,610
  • Kindergarten Teachers: $57,860
  • Coaches and Scouts: $36,330
  • Interior Designers: $57,060
  • Health Education Specialists: $56,500
  • Career and Technical Education Teachers: $59,140

A Worthy Alternative: The Associate’s Degree

If you’re still on the fence about the value of a bachelor’s degree versus the cost of higher education, then you may want to consider a viable alternative—the associate’s credential. Associate’s degree programs are two-year academic offerings that require just half the time—and a fraction of the cost—of bachelor’s degree options, allowing students to stop paying tuition and begin earning salaries much sooner. This setup can help tremendously when it comes to the issue of student debt. Do associate’s degrees actually pay off, though? Let’s look at what the numbers say.

First and foremost, an associate’s degree certainly helps when it comes to getting a job. According to the Bureau of Labor Statistics (BLS), high school graduates who successfully pursue an associate’s credential will lower their chance of unemployment by an entire percentage point, from 3.7% to 2.7%. Wages also increase. In 2019, employed individuals with an associate’s degree made an average of $887 per week compared to $746 weekly for those employees with just a high school diploma. Of course, these numbers aren’t quite as promising as the statistics associated with a bachelor’s credential, but they are encouraging, especially for students who are concerned about the hefty student debt burden that comes along with a bachelor’s degree.

High-Paying Associate’s Degree Jobs

While the average associate’s degree pay pales in comparison to that of bachelor’s degree positions, this isn’t always the case. There are some standout associate’s degree careers associated with very lucrative wages. Some of these are listed below for your reference alongside the median annual earnings as of 2020, according to the Bureau of Labor Statistics (BLS):

  • Radiation Therapists: $86,850
  • Nuclear Technicians: $84,190
  • Air Traffic Controllers: $130,420
  • Dental Hygienists: $77,090
  • Diagnostic Medical Sonographers: $70,380
  • Electrical and Electronic Engineering Technologists and Technicians: $67,550

Low-Paying Associate’s Degree Jobs

While an associate’s degree may be a viable option for college hopefuls with the desire to reduce student debt, there are some career paths that may be less desirable due to low wages. Some of these occupations that fall on the lower end of salary averages include:

  • Veterinary Technologists and Technicians: $36,260
  • Preschool Teachers: $31,930
  • Dietetic Technicians: $30,110
  • Forest and Conservation Technicians: $38,940
  • Desktop Publishers: $47,560
  • Environmental Science and Protection Technicians: $46,850
  • Information Clerks: $36,920

Paying Off Student Loans: The Upside

It’s rare to find a discussion of student loans that centers on their benefits. While a loan is always something to approach with caution, individuals considering borrowing money to pay for a bachelor’s-level education should be aware of some of the unique advantages of student loans. Unlike traditional loans, student loans are available without a credit check or a cosigner in most cases. They also have low fixed rates, meaning interest rates can’t change over time, a feature that protects lenders from spikes in monthly payments.

Perhaps the most beneficial aspect of student loans, as opposed to private loans, is the flexible repayment options. In most cases, you won’t have to start paying these loans back until six months after graduation. This is referred to as a grace period and gives recent graduates some time to find a job and get financially settled before beginning regular payments. Plus, if you find yourself experiencing hardship like unemployment or underemployment, for example, you may qualify for a forbearance or deferral that would postpone payments for a period of time. On the other hand, if you don’t make enough money starting out to make your regular monthly payments, you can apply for an income-based repayment plan. Under this type of plan, the amount of your payment is reduced so that it is more manageable. There are also various student loan forgiveness programs for qualified lenders like teachers and professionals in public service roles. Forgiveness, of course, brings your balance to $0, and you will owe no more further payments.

An Argument for Following Your Passions

Despite our above warnings regarding low-paying careers at both the associate’s and bachelor’s levels, there’s an argument to be made that despite any financial concerns, you’re better off pursuing an academic discipline aligned with your interests instead of worrying too much about the financial payoff. For example, if you’re a liberal arts person, you would be better off getting a bachelor’s degree in English, philosophy, art history, or the subject of your choice than enrolling in business or engineering school. You will enjoy the work you do and excel further in your career as a result— unless you like business or engineering, that is.

At the end of the day, it’s really about what you hope to gain by pursuing an academic degree. Do you want to be intellectually fulfilled, for example, or is it your goal to attain a position helping others? Alternatively, are your motivations more financially-centered? (It’s perfectly okay if they are, of course). All talk of tuition and wages aside, the best thing you can do for your future self is, to be honest about how you want your degree to serve you after graduation. From here, you can decide what a bachelor’s degree (or associate’s credential) is really worth to you.

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Maxim Sorokopud
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Julie McCaulley
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