Weighing the cost, benefit of taking loans for college degree

Photo credit: Jason Pedreros

Attending Baylor University is more expensive than it has ever been. On-campus living costs in total come out to $63,220 for the nine-month academic year, with off-campus total expenses calculated to be a little lower at $62,516. At this cost, students could eventually spend a quarter of a million dollars getting a four-year degree. Though a significant number of students do receive a scholarship from Baylor, the amount is often only a fraction of tuition costs.

As a result of this, a little over half of all Baylor graduates leave the university with student debt. The average amount of this debt is $44,859, according to the Student Loan Debt by School by State Report, a rundown of data provided annually by LendEDU.

Baylor alumna Lynden Scott graduated in May 2018 with a bachelor’s degree in political science and is now living and working in Waco. Despite earning a substantial scholarship and receiving help with tuition from her parents, she is still having to pay back student loans. Scott said she is grateful for her education, though the most applicable things she learned during her time at Baylor in regard to her future were not about political science.

“If I’m honest, I’m not sure that I am going to use my degree, but I think that the skills that I learned, even just people skills and managing my time I’ll carry with me for the rest of my life along with the friendships I’ve made as well,” Scott said.

Though attending the university is expensive and many at Baylor will have a loan payment waiting for them six months after they graduate, the benefits of higher education seem to outweigh the cost in most students’ eyes.

This sentiment is reflected by a statement in a recent Wall Street Journal article that described most college graduates as living longer, healthier and wealthier lives than their counterparts who earned no higher than a high school diploma.

Dr. Scott Cunningham, an associate professor of economics at Baylor provided some explanation as to why, other than having a heftier wallet, this could be true:

“The causal effect on a college degree on crime, your incarceration rate, probability of being a public assistant, your ability to buy a house and even your marriage market opportunities, is significant. The ripple effects of a college degree are gigantic. That said, I don’t know if the returns on college are the same for every major, but you can go into certain majors purely for consumption reasons, like the love of learning, and then when you graduate you’re just going to have to hustle,” Dr. Cunningham said.

Cunningham’s comment stemmed from personal experience. Having majored in English at the University of Tennessee in Knoxville, he graduated without having a related career lined up and started waiting tables in Louisiana. Eventually he landed in a job doing market research, and this eventually led him an interest in economics. He now has a Ph.D. in Economics and does extensive research while teaching at Baylor.

Despite Cunningham’s story that ended in success, many do not. Statistics from the WSJ article present the possible danger of being unemployed even after graduating from college. According to the data, 32 percent of college grads end up in a position that does not require a degree. This means that jobs that do not require a college degree are being filled, often for 10 or more years, by those who did spend the money, time and effort on a degree.

In order to try and prevent these possible underemployment and debt problems later down the line, students are urged to think realistically and prepare for the future.

“Experts say students should be sure they have the wherewithal to finish, pick a major that is likely to prepare them for a solid career and avoid taking on too much debt,” the article said.