By Jason Sethre
Publisher
Fillmore County Journal
jason@fillmorecountyjournal.com
On the front page of this week’s newspaper is a story about high school students taking advantage of the Post Secondary Enrollment Option (PSEO) that’s been around for decades. Since the onset of the pandemic in 2020, with more students and schools adapting to the online learning model, the floodgates have opened for PSEO enrollment.
And, this is a good thing.
PSEO provides an opportunity for ambitious young people to minimize the debt load of earning a college degree.
The downside of PSEO is how it impacts school districts. And, it’s a big deal. For many schools challenged with already declining enrollment, now they are saddled with dedicating resources (expense) to serve students for which they potentially receive no funding from the state.
It shouldn’t be that way. The school districts shouldn’t be punished for providing resources to PSEO students… for helping students succeed in life.
Student Loan Debt
Over the past few years, there’s been a lot of conversation about student loan debt forgiveness. According to the U.S. Department of Education, the Biden-Harris Administration has forgiven over $175 billion for more than 4.8 million Americans.
We have a lot of colleges “selling” degrees for an employment market that doesn’t justify the investment. Like it or not, college has to be viewed as an investment, and we need to question that return on investment. After you earn a degree, how much money can you make per year to pay off the student loan debt along with rent, a car payment, groceries, gas, insurance, cell phone, and usual living expenses? How is the job market for someone with that degree?
Nobody is making anyone go to college. There are other options that pay well, and sometimes have a better return on investment.
There are trade schools encouraging people to consider working in a variety of construction fields, and many of them will pay for a person’s education. Some employers will train on the job, and the most talented people will make a good living.
The other thing that I don’t hear people talk about is with respect to the brave men and women who serve in our military to help pay for college. They have made a sacrifice, and in return they receive funding to help cover the cost of their college education upon completion of their military service.
What about the people who have worked two or three jobs while going to college, so they can strive to earn their degree with minimal debt service?
It just doesn’t seem right to me that so many people have worked hard to pay off their college debt, and along comes a government program that completely wipes out that debt for a percentage of the population.
It’s a slap in the face to those who earned their way.
Making a Plan
Let’s run the numbers.
If we assume college costs $20,000 per year, to earn a four year degree, that’s supposedly $80,000 of expense.
If a person takes out a student loan for $80,000 and chooses to pay it off over the course of 10 years at 6.8% interest, that person will be making a monthly payment of $920.64 for 10 years. That hinders that person’s ability to purchase a home or vehicle, because it impacts their debt-to-income ratio. By the time that loan is paid off after 10 years, the total cost of that college loan will amount to $110,477.12, which is $27,619.28 per year.
If kids want to go to college, parents and students need to be thinking about this when the kids are young.
There are tons of opportunities for kids to start working at age 14 in our area. Dishwashing and waiting tables at restaurants, for starters. And, they learn people skills and money management along the way.
There’s an estimated $100 million in college scholarships and $2 billion in student grants that go unclaimed every year. So, apply for scholarships and student grants. You have nothing to lose and everything to gain.
Work while you are attending high school and college. It amazes me how many people I’ve encountered who graduated college and never had a job all throughout high school or college. Employers are more impressed by those who can strike a balance between work, school, and extra curricular activities.
I would rather see our local school districts receive funding (not be penalized) for helping a student earn their high school diploma at the same time they earn an associate’s degree in college, rather than paying off student loan debt.
We need to start dealing with the cost of college on the front end before students enter college, and not wait until the debt has already been accumulated and then try to figure out how to pay for it.
Leave a Reply