What is the Real ROI of a College Education?
In the year 2020, when you graduate high school, it is commonly expected that your next step is college. Ask an 18-year-old what they want to do with their life, most likely they do not know; however, they will be attending college. Many will not do the homework and choose to major in obscure majors like drama and art. Although it is a beautiful thing when young people chase their dreams. Unfortunately, for the majority of these students, when they finally receive their diploma, they find that their majors of choice will not land them a job to pay the bills. Now let's consider all of the other degree paths as well. If you ask your average business, education, biology, engineer, political science, communications, etc. students, what type of job in that field they want to pursue or what they average income of that career is, they are not able to tell you.
You are seeing more and more of this in Generation Z because they do not have a self-reflected purpose or idea of what they want to do post-degree, but have pressure from their parents to go to a four-year school. This idea has been passed on from generations and students are taught to believe that if you do not attend college after high school, then you are doomed to fail in life. This line of thinking is what has led us into this current student loan debacle. Currently, our government is debating whether to forgive a total of $1.6T in student loan debt - sounds like an economic crash in the making. The reality is it is up to the parents whose children are either in college or graduating high school in the next few years to lead that charge.
Below are a few discussion points to have with your child.
- 73%... 73 PERCENT of people who are college-educated say their first job out of school is in a field outside of their major.
- $25,921… is the average amount of student loan debt per student earning a four-year degree at a public institution.
- $2M… 2 MILLION DOLLARS is the average amount of lifetime earnings difference between a top-earning major like engineering versus choosing a major in humanities.
- 14… FOURTEEN is the amount of blue-collar jobs that will pay you well into 6 figures.
Now, what does all this mean?
As a parent, the most important thing you can do for your child is to help them understand what the right major/career path is for them. Failure to do so can result in an exorbitant amount of loans with a degree in a field they are not familiar with. Not to mention, they are missing out on earnings in other careers they could have done very well in.
Here are a few things you want to walk through with your child to help guide them to an informed decision:
- YOUR CHILD IS YOUR CHILD… NOT YOU. This is important to remember - some parents try to steer their children in a certain direction because they wished they would have done things differently. The best thing you can do here is help them understand what kind of life, career, and income they want for themselves.
- STRENGTHS… One of the biggest misnomers people struggle with is understanding what they are good at. Everybody struggles with this. The easiest way for your child to determine what major to study (or if they should go to college in the first place) is figuring out what they are good at. The best way to do this is to have them take the StrengthsFinder test. The StrengthsFinder test will also encourage and inspire your children to embrace and step confidently into what their strengths are.
- MENTORSHIP… Once your children have a firm grasp on their strengths and possible career options, find someone in that field who they can spend time with. Mentorship at its purest form is a huge leg up and when you find the right mentor it can be a game-changer in your child's development. Something they will thank you for, for the rest of their lives!
- EXPERIENCE… The key to your child knowing if they like something or not is to DO IT. Encourage and enable them to experience as much as possible. Pretty soon they will be able to cross off the things they do not like and will be left with the things they do like.
This article is not meant to deter you from sending your child from college, but rather a new process for high school graduates to allow them to gain a better understanding of their future and how to get there.
No longer should college seem like an automatic next step; instead the return on the investment of earning a diploma should be thoughtfully considered.
If your child insists that college is not for them and they prefer to begin working immediately, keep in mind that this can also be a fruitful career path. Regardless of what career path they choose, help your kids help themselves and watch them thrive as they fly from the coop.