Originally posted at TheSimpleDollar.com.
For a lot of people, going to a four-year college seems like an automatic choice when they graduate from high school. The reason is obvious – higher income. According to the National Center for Educational Statistics, a bachelor’s degree accounted for an average of $16,900 in additional income per year compared to a high school diploma ($30,000 versus $46,900).
Over a 30-year career in the workforce, that’s more than a $500,000 difference in earnings. These numbers may not paint the whole picture, however. Due to the increasingly high costs associated with a college education, as well as other drawbacks, more and more people have been considering trade school as an education alternative.
1) Length: Four (or More) Years vs. Two Years
For starters, a bachelor’s degree typically takes four years of study, which means that people who enter the workforce after receiving their bachelor’s degree aren’t doing so until age 22. That shaves some years off of a person’s career and can be considered an opportunity cost for experiencing the ‘real world’ hands on instead of being in a classroom. Plus, a four-year program usually makes you take classes outside of your major to fulfill credit requirements. Unless you enjoy spending time in a classroom, it may seem unnecessary to pay for extraneous credits and courses. Sure, that improv theater class was fun, but was it helpful for your chemistry major?
2) High Cost of a Bachelor’s Degree
Another drawback is the cost. Research conducted by the Idaho Department of Labor found that the average bachelor’s degree in the United States costs $127,000! Not only that, but nearly 70 percent of students take out loans to help pay for school. According to the study, over 20 percent of students with loans owe more than $50,000, and 5.6 percent owe more than $100,000 at the end. Although some student loans are certainly better than others, the added cost of accruing interest makes the overall expense of receiving an education in the U.S. significantly higher for the average student than the already steep price tag suggests. The college lifestyle isn’t cheap either — dorming, paying for food, going out and even doing your own laundry adds up!
3) Dropout Rate + Late Grads
A third drawback: Some people simply aren’t prepared for the rigors of a four-year college. For many students, college is their first experience away from home and, without an adequate plan, it’s easy to stray off course. In fact, the Institute of Education Statistics estimates that 40 percent of attendees at a four-year college drop out before completing their degree. If you find yourself as a part of that 40 percent, not only have you incurred some of the expense of college, you left without receiving a degree. For the 60 percent that do complete their degree, a whopping 64 percent take longer than four years to graduate, costing themselves nearly $70,000 in lost wages and educational expenses per year, according to U.S. News. Most colleges don’t even require students to pick a major until the end of their sophomore year, creating a class of undecided students who may have wasted their time and credits on courses that they chose not to pursue.
4) Poor Economic Conditions
Finally: Job prospects for new graduates may not be as bright as they had expected. Although some college majors are faring better than others when it comes to labor market outcomes, a recent report released by the Economic Policy Institute states that overall, the unemployment (8.5 percent) and underemployment (16.8 percent) rates for college graduates under the age of 25 are nearly double what they were in 2007. Over the past five years, graduates have faced sluggish labor markets. Young graduates are faced with limited job opportunities and difficulty paying off their student loans. College degrees are a career investment that require a considerable amount of both time and money, and the portion of grads who are unable to find desirable employment (or employment at all!) are seeing negative returns.