75% of College Students Have Buyer’s Remorse About Their Student Debt
Our future is largely determined by whether or not we go to college, whether or not we get a degree and what that degree is in. Millions of Americans have enrolled in college, gone to college, borrowed money to go to college, but never ended up getting a degree. 40% of those who enrolled ten years ago have college debt but no college degree.
President Biden is talking about forgiving $10,000 of student loan debt for tens of millions of Americans. In fact, it would completely wipe out the debt of 15 million people, a third of all the college debt borrowers, half of them don't have a degree and four and a half million of them are already delinquent or in default on their loan repayments. Wiping out $10,000 of debt per borrower would cost the federal government $230 billion. A quarter of a trillion. This is why it's such a political football in the middle of the government fighting inflation. We're now talking about throwing another quarter of $1,000,000,000,000 into the economy by virtue of debt elimination for these 15 million people. We have to ask ourselves if the government can afford it. We have to ask ourselves if, in fact, this is a fair way to inject capital into the economy.
The Free College Experiment in NY
Five years ago, for example, New York State made college free. A million students, residents of New York State qualify for free college. And of those million students over the last five years, guess how many have taken advantage of this? 73,000. One of the reasons they say so few students have enrolled under this free tuition program. The application process is a barrier. It's complicated and difficult, and most can't get through it.
College Students and Their Buyer’s Remorse
There's a new survey of recent college graduates. Nearly six out of ten say their degree did not prepare them for a job. Half say they haven't even applied for entry level jobs because they feel they're underqualified, even though they've got a brand new college degree. 75% of college grads have buyer's remorse about their student debt. Only 25% say given the chance to do it again, they would. Seven out of ten say they would not go to college, would not incur that debt if they could do it all over again. And more than half regret the specific degree that they chose to get wrong field. They say, “I should have studied something else.” 41% say that if they could do it all over again, they would choose a degree in a field that has more in demand, better opportunity for getting a job and a good paying job and a good career. College students as a result, are quitting college to take jobs that have new high pay offers. Employers around the country are struggling to find workers.
And so a lot of these college kids are saying, why should I go to college and spend 30 or 50 grand a year going into debt to do so when I can go get a job making 30 or 50 grand a year. There are 700,000 fewer students enrolled in college this year across the country. That's a 5% drop from last year. The numbers are even bigger. A community college's enrollments down 800,000 since the start of the pandemic.
I've talked with you often about the issue of college planning as part of your overall financial plan. You need to make sure you're talking with your children, your grandchildren who are headed to college, make sure they are handling the college question correctly. Should they go to college? Should they go right now? What kind of a college should they attend? How much are they going to be willing to spend on their degree? How much debt are they going to incur and what degree are they going to obtain? What are the economic and occupational opportunities in that degree?
Because with exponential technologies, so many fields are going to be obsolete, replaced by robotics, artificial intelligence and other technologies. Learn from those who got their degrees over the last ten years. Avoid the regret that they are expressing. There are two ways to learn. You can learn from experience, which is very time consuming and very expensive, or you can learn from the experiences of others saving you that time and potentially, that regret.