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Over the next couple of weeks, six finalists will be auditioning for the opening of “staff writer” at Consumerism Commentary. Each will be providing two guest articles to share with readers. After the six writers have shared their guest articles, readers will have an opportunity to provide feedback before we select the staff writer.

This article is presented by Debbie Dragon, a full time freelance writer and co-owner of ReliableWriters.

Last year, in spite of the recession, the difference in the median earnings between high school graduates and college graduates rose to record highs according to The New York Times’ David Leonardt. He reported on the average earnings of graduates, based on information from the Census Bureau which state the following average annual salaries for people of varying education levels:

  • High School Graduates: $27,000
  • Some College (no degree): $33,000
  • Bachelor’s Degree: $47,000

What isn’t clear from Leonardt’s argument that college is the best investment a person can make, is how much debt the average student graduates with in order to complete their education. As a 29 year old college graduate still paying student loans for a Bachelor’s Degree obtained in 2002, I think the amount of student loan debt a student must carry to complete their education is an integral part for determining whether the education was worth the investment or not.

The College Board reports the average cost of tuition in 2009-2010 as:

  • Public 2-year colleges: $2,544
  • Public 4-year colleges: $7,020
  • Private 4-year colleges; $26,273

These numbers represent tuition only, and do not include room and board, books and other miscellaneous fees which anyone who has gone to college or paid to put their child through college knows can add up to considerable amounts each semester. It’s true that many students receive grants (money that doesn’t have to be paid back) which helps reduce the amount they pay out of pocket or through loans — but according to The Project on Student Debt, graduating seniors who receive educational grants actually end up with higher student loan debt than students who do not receive grants. Graduating college seniors receiving Pell Grants had an average debt of $24,800 in 2008. Other than academic or merit-based grants and scholarships, students receiving grants usually have lower family incomes than students who are not eligible for grants –- so it makes sense that they would go on to borrow more money to cover the miscellaneous fees, room and board and books in addition to tuition costs.

Average student debt upon graduating, according to the Project on Student Debt in 2008:

  • Public Universities: $20,200 in debt
  • Private Non-Profit Universities: $27,650 in debt
  • Private For-Profit Universities: $33,050 in debt

So while there is no question that statistics show us that most college graduates earn a higher annual salary than non-graduates, there are still other factors to consider to declare whether the cost of education was a good investment.

Adrian Cartwood, a blogger at 7million7years.com, questioned about the extra 4 years a high school graduate has in the workforce while the college students are still in school. Don’t they average a 4 year head start earning money? He shows that if the high school graduate saved 15% of his or her earnings every year and earned the average 8% return, he or she would end up with $468,168 after 26 years of working and saving (based on the U.S. Census Bureau’s 2007 American Community Survey of estimated salaries for high school graduates and a 4% income increase annually). He determined the college grad, even after getting a 4-year later start on saving and starting out with $20,000 in debt, would end up with $794,000 at the end of 26 years. In Adrian’s example, we see that college is worth $326,000.

All of these statistics and examples have made good points, but I think the answer to whether or not a college education was worth the investment depends on each individual and really can’t be summarized by “averages.” If a student goes through college and graduates unable to get a job in his or her field of study –- chances are they’re going to earn wages that are closer to the high school graduates’ salary. That income is not likely enough for the new graduate to pay back student loan debt, pay for their living expenses, and begin saving for retirement upon graduation. There are even college graduates who DO get positions in their field of study that don’t start out at the top of the pay scale which makes it difficult for them to keep up with living expenses and student loan repayments after graduating. Since there are never guarantees that a college graduate will land a well paying position due to their degree, I think a college education might better be classified as a high-risk investment.

This is a guest article by Debbie Dragon, one of six finalists interested in being Consumerism Commentary’s staff writer.

Photo credit: Yakinodi
Is college worth the money?, MSN Money, Morning Joe video, September 28, 2009
College Costs – Average College Tuition Cost, The College Board
Project on Student Debt

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Over the next couple of weeks, six finalists will be auditioning for the opening of “staff writer” at Consumerism Commentary. Each will be providing two guest articles to share with readers. After the six writers have shared their guest articles, readers will have an opportunity to provide feedback before we select the staff writer.

This article is presented by Debbie Dragon, a full time freelance writer and co-owner of ReliableWriters.

When farming was a common way of life, more Americans were self-employed than not. With the growth of corporations in recent decades, many Americans decided to get on the corporate bandwagon in hopes of climbing the ladder to success. In recent years, due partly to the struggling economy, many people are turning to self-employment. When people are laid-off, many take their skills to the marketplace and become entrepreneurs.

Thanks to technology, many businesses can be started from home and with little capital. This is a good thing, since banks are hesitant to lend money to anyone, let alone a business start-up. For a few hundred or a couple thousand dollars, a business can be set up complete with a logo, website and business structure. While it’s true that a poor economy may mean less people have the money to buy whatever you sell — many successful businesses start during a recession and are then positioned perfectly when the market turns around.

According to the last U.S Census, more than 10 million Americans are self-employed. I would be willing to wager that the number has increased drastically in just the last five years, with more people starting freelance and home based businesses “on the side” to increase their income or as a replacement for a job lost to the economic conditions. Self-employed Americans do everything from construction to accounting to crafts, but the most commonly selected industry on self-employed income tax returns is “professional and business services.”

In previous decades, there was a tendency for self-employed Americans to be male and white. During the years between 1976 and 2003, a surge of women entrepreneurship blossomed, with an increase from 27% of self-employed workers being women to 39%. Many women start small businesses in an effort to both contribute to the family income and still have the flexibility to raise their families. You’ll also notice that self-employed people are over-represented at the top of the income curves for America, helping prove that greater rewards are given to those who take larger risks (in some cases). Entrepreneurship has always been valued in American culture, and a poor economy seems to nurture it rather than squash it.

For every depressing statistic and news story given about the economic condition it’s almost as if the entrepreneurial spirit is awakened in people who are determined not to sit by helplessly as jobs are lost. The economic conditions serves as motivation for some, whether that motivation is driven by plain fear — or hidden ambition.

This is a guest article by Debbie Dragon, one of six finalists interested in being Consumerism Commentary’s staff writer.

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