Student loans: Lessons learned, choosing a major, and overcoming regrets
“First off, I would have not gone to Cornell,” says Richard. “A local state school would have sufficed just as well.” He also wishes that he would have made saving a priority during the six years he took off between degrees. “I had six years. If I could have saved 10 grand per year, I wouldn’t be in the predicament I’m in now.”
However, Richard’s situation isn’t hopeless. Since he earned his master’s degree as a P.A., or physician’s assistant, he now earns a salary of about $115,000 per year. His choice of major, or “saving grace” as he calls it, remains the reason why he doesn’t necessarily feel hindered by his enormous debt load. After all, $115,000 is plenty of money to repay his student loans, save, and retire in a reasonable amount of time, according to Richard.
“Making smart decisions has allowed me to save about $115,000 in retirement accounts (403(b) and Roth IRA),” said Richard. “I also have about $30,000 saved in a taxable account as well. I accomplished all this in the past five years by spending wisely and making saving a priority.” And, despite his huge debt load, Richard’s family has an after-tax savings rate of around 52 percent.
Kasey and Richard’s experiences are full of lessons — some obvious, some not so much. First of all, both stories illustrate the importance of choosing a college major that makes financial sense. Due to changes in technology and the workforce, the advice to “follow your passion” may no longer be advantageous to your career or your financial situation.
Of course, if you want to follow your passion, you still can.But, like Kasey, your passion may end up costing far more than it’s worth. According to a recent study from Georgetown University, a degree in fine arts brings in an average starting salary of $30,000. Making matters worse is the fact that unemployment for fine arts majors currently stands at around 12.6 percent. How’s that for adding insult to injury?
Another study from Georgetown University reports that the highest-paying college majors are currently in engineering and technology, with the top-paying spots filled by petroleum engineers ($120,000), Pharmacy Pharmaceutical Sciences and Administration ($105,000), and Mathematics and Computer Science ($98,000). Since this study focused solely on careers that can be attained with a bachelor’s degree, physician’s assistants weren’t mentioned. However, Forbes listed the P.A. degree as the “No. 1 Best Master’s Degree For Jobs” last year, with a mid-career median pay of $97,000.
But, what about student loan debt? Kasey and Richard both admit that they borrowed way more than they ever understood or planned for. Fortunately, some basic tips have been established by sources that have a would-be student’s best interest at heart. One of them, the Project on Student Debt, hopes to “identify cost-effective solutions that expand educational opportunity, protect family financial security, and advance economic competitiveness.”
According to the Project on Student Debt, students need to “look before they leap” when borrowing money for school. Some other tips: