In a Recession, is College Worth It?
Darla Horn, 26, acknowledges she didn’t give much thought to the cost of college when she enrolled at State University of New York in Purchase.
“My plans were to get out of Texas, and college became incidental,” says Horn, who grew up in Nacogdoches, a city of about 32,000 near the Louisiana border. Because she didn’t qualify for financial aid, she took out student loans, graduating in 2005 with a double major in journalism and anthropology and more than $80,000 in debt.
Her loan payments were manageable until this year, when she lost her job as an information technology recruiter earning about $100,000 a year. Currently self-employed, she’s behind on her loan payments. In April, she organized an exhibition in Long Island that featured artwork by graduates who are trying to raise money to pay their student loans.
“To this day, I have yet to see the complete value of my education,” Horn says.
For years, an article of faith in this country has been that college is the gateway to a better life. So deeply held is this belief that many students, such as Horn, borrow tens of thousands of dollars to attend prestigious public or private universities. But as the worst recession since World War II trudges into its 21st month, many graduates are discovering that the college payoff could be a long time coming — if it comes at all.
New and prospective students, meanwhile, are abandoning their “dream schools” in favor of more affordable options, forcing many colleges to work harder to justify their price of admission.
In July, the unemployment rate for college graduates was 4.7%, up from 2.8% a year earlier, according to the Bureau of Labor Statistics. That’s still considerably lower than the 9.4% rate for workers with only a high school diploma.
But unlike out-of-work high school graduates, many unemployed college grads face the additional burden of student loan payments. Two-thirds of bachelor’s degree recipients last year graduated with an average debt of about $23,000, according to Finaid.org, a financial aid website.
Total debt for borrowers with graduate or professional degrees ranges from $30,000 to $120,000, Finaid.org says.
New graduates face an even more unforgiving job market. Employers expect to hire 22% fewer graduates from the class of 2009 than they hired from the class of 2008, according to the National Association of Colleges and Employers.
The economic downturn is affecting the choices that students and their parents make:
*Community college enrollment is soaring. More than 90% of community college presidents said enrollment was up in January from the previous year, and 86% reported an increase in full-time students, according to a survey by the Campus Computing Project, which studies the role of information technology in higher education.