Facing the Facts: The Hard Truth About Funding a College Education

By John Brummitt

A great deal of research has been done regarding college debt. Politicians have much to say about how student debt should be canceled or forgiven, pointing to the detrimental effects of debt on starting a career.

However, a recent study revealed students are more affected by when they graduate from college than the weight of debt they carry from college. Those who graduate during a recession are more negatively affected by student debt load and slow career advancement than those graduating during a strong economy. Starting your career in a sluggish economy can hinder earning potential up to 20 years, along with stunted career growth potential. Yet, students can’t control what the economy will be doing when they graduate from college, and most cannot hit pause when the time comes to enter the workforce. So, what are college graduates to do?

One of the most significant handicaps to your working career is debt. Whether the economy is good or bad, debt is quite limiting. While more options to relieve debt exist in a good economy, students and parents must remember there is no guarantee the economy will be good on graduation day. In 2008, the graduating class had no warning the record bull market was about to crash down around them. Many went from expecting high-paying first jobs to living with parents for a year or more while they searched for any available employment. Many never found jobs in their fields of study, so they switched fields and never went back. We all know individuals with degrees in fields they have never worked. So, how do you protect yourself from the traps of a down economy?

First, remember you are the one responsible for your debt obligation. Look for all the ways to stay out of debt. As Benjamin Franklin famously warned, “An ounce of prevention is worth a pound of cure.” Apply for every available scholarship and work and pay for your education as you go.

Billions of dollars in scholarship money are available for students willing to put in the work to find the scholarships and qualify for them. If the current government chooses to relieve student debt, view it as a bonus. But don’t count on it, because it may never happen.

Second, start a career search early. Start looking for employment before you graduate. Get your name out by participating in summer internships or by volunteering. Many employers are interested in meeting potential employees about to enter the workforce. If nothing else, interacting with companies within your field of study trains you to interview and communicate with potential employers. You will find it is easier to get a job when you already have a job. Being in school gives you time to look around, gain some experience, and weigh your options. Make the most of the time.

We are always responsible for our actions and the decisions we make. Preparing for those decisions (or helping our kids prepare for those decisions) can protect us from the unexpected, those things we cannot control. College isn’t for everyone, and debt shouldn’t be either. Do your research and carefully create a plan to help you reach the best position to start your working life.

About the Writer: John Brummitt became director of the Board of Retirement in January 2016. He graduated in 2011 with an MBA from Tennessee Tech University. A 2004 graduate of Welch College, he has been with the Board of Retirement since spring 2006.