Abell thought her degree would help her land a job in the fashion industry but instead she said her school placed her in a part-time job at a Victoria’s Secret store.
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“I always say going to college was my biggest mistake. I tell everybody that,” Abell said. “The biggest mistake of my life was my $85,000 piece of paper that now is worthless.”
Abell isn’t alone in her thinking. The high cost of higher education — and the uncertain job market in many fields — has saddled some graduates with debts they have no hope of ever repaying. At least one expert warns that if colleges don’t begin to find innovative ways to decrease costs for students, several will risk closing.
“The rate of return has started to decline in some cases,” said Richard Vedder, an Ohio University economist and director of the center for College Affordability. “It’s a more risky proposition than 18-year-olds would like to take.”
Student loan debt totals around $1.4 trillion dollars nationally, according to a recent report from Wallethub that ranked Ohio as the third most indebted state for student loans. The staggering statistics have cooled the demand for college degrees and forced some to consider alternative routes to getting a job, Vedder said.
A prime example, Vedder said, is that Amazon offers more money for some of its warehouse jobs than other employers do for positions that require a degree.
“The idea that everyone is going to be doing an intellectually daunting job in the next generation is vastly overrated,” Vedder said. “We still need people to build buildings, dig ditches and things like that. Perhaps we’ve actually under-invested in vocational training.”
‘I am petrified’
Like Abell, who says her low pay means she will likely default on her loans, dozens of college graduates told this news organization they’re concerned about their prospects for earning enough to pay off their debts.
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Rachael Powell, a 2009 nursing graduate of Clark State Community College, said she only borrowed around $6,000 but ended up owing about $16,000 because of interest.
Joseph Bretzfelder, who graduated from Wright State last year with around $45,000 in debt, said paying off his loans is so stressful that he considers them “one of the worst decisions” he’s ever made.
“I am petrified about never being able to afford a home or afford to have children,” Bretzfelder said. “It’s a massive source of stress in my life, to the point that I’m having euphoric dreams at night about winning the lottery, even though I never play.”
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For their part, many colleges are focusing more resources on lining up students with good-paying jobs.
Most colleges in the Miami Valley offer career services for free to both students and alumni, said Jason Eckert, University of Dayton director of career services.
“Colleges are facing more and more market pressure to perform in this area,” Eckert said.
That’s why Linda Moodie chose to attend UD in pursuit of an engineering degree, even though it resulted in her owing around $200,000 in loans once interest is factored in.
With UD’s reputation for churning out good engineers, Moodie said she knew she’d be able to get a job and pay down her debt. Still, the amount of debt Moodie accumulated means she has to live with her parents to afford the $1,200 a month payments on her $55,000 per year salary.
“The interest is what kills you…It’s about $26 a day,” she said. “I was like, are you kidding me? That’s insane.”
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‘I am a big believer’
College is still a worthwhile investment for most people, recent data from the U.S. Bureau of Labor Statistics shows.
Just 3.6 percent of people with an associate’s degree were unemployed in 2016 — well below the national average for those without degrees — and the numbers are even lower for those with bachelor’s degrees: 2.7 percent.
In general, the higher level degree a person has, the less likely they are to be unemployed, according to the bureau’s data.
| Educational attainment | Unemployment rate (%) | Median usual weekly earnings ($) |
|---|---|---|
| Doctoral degree | 1.6 | 1,664 |
| Professional degree | 1.6 | 1,745 |
| Master's degree | 2.4 | 1,380 |
| Bachelor's degree | 2.7 | 1,156 |
| Associate's degree | 3.6 | 819 |
| Some college, no degree | 4.4 | 756 |
| Total | 4 | 885 |
| Source: U.S. Bureau of Labor Statistics |
People with a degree also earn, on average, hundreds of dollars more per week than those without one, the bureau’s data shows.
“I am a big believer in the economic return,” Eckert said. “People who had a bachelor’s degree had 40 percent more weekly earnings.”
‘Against the wall’
As tuition costs have received more attention in recent years, many colleges have begun to offer tuition guarantee programs that promise a set price for each year — typically following an increase in the first year.
Miami University, Ohio State University and UD all offer guarantees and Wright State officials have said they may consider offering one.
But while such programs can eliminate uncertainty for students, Vedder said they are largely a “marketing device.”
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“It does not dramatically lower the cost,” he said.
One way universities could lower costs is by eliminating requirements for students to live on campus, Vedder said, as costs for room and board are almost always on the rise.
A big part of Moodie’s debt at UD was from living on campus she said. If she changed anything about her college experience, Moodie said she would have considered commuting to cut down on costs.
The longer colleges go without making changes, the more dramatic they may need to be, Vedder said.
He pointed to Purdue University in Indiana, a school that is experimenting by paying tuition for a group of students in exchange for a percentage of their income for a few years after graduation. The concept puts more of the burden on the university to ensure a student gets a good job, he said.
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If something like Purdue’s experiment isn’t enough, Vedder said we may one day even see a national or state-wide test for a college degree. He said it might mimic the test people take to earn their General Education Development degree, commonly referred to as a G.E.D.
“When you’re pushed against the wall you’ve got to come up with new things,” he said. “I think we need those new ideas.”
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