You might’ve heard
about “Occupy Wall Street” movement that originated a while back. One of the interesting topics was educational
debt. The participants suggested that
the government forgive educational loans.
I would have supported the movement but selfishly was not inclined
because I just recently paid off my $50,000+ loans from College and Graduate School.
What was interesting to me was the fact that many students
when looking for a school and choosing a career do not focus on the “Return on
Investment” (ROI). There are a number of
items that are worthy of consideration when determining a school for
undergraduate and post graduate learning.
Here are key items that I believe will serve you well in considering
prior to choosing the school for you:
What makes you happy?
To determine this you’ll need to be honest about your understanding of
what you are good at and what you can do for hours, days, weeks, months at a
time and be happy each day. A good way
to find out is to get into a scholarship program through your school.
Next, consider your occupational opportunities and what you
might be making throughout your career.
A good place to start would be a free salary information resource like
www.careerbuilder.com’s salary calculator: http://www.cbsalary.com/?siteid=cbsubnav
Or monster.com’s Salary Wizard:
This will give a good idea of what your income might be
based on current market data for your position.
As an example lets use an English teacher’s salary in New York: http://monster.salary.com/SalaryWizard/Public-School-Teacher-Salary-Details-New-York-NY.aspx
Median Salary was $58,644.
How much should your education cost you to make this worth while?
If you look at statistics you’ll see that about half have a
bachelor’s degree and the other half have a master’s in education:
The other example is a Floor Broker in New York:
Median Salary is $160,200.
Here are the statistics on education for brokers: http://monster.salary.com/salarywizard/Floor-Broker-Job-Description.aspx
The total average cost for just the
education is about: $89,976* (we used the average annual cost for public and private
institutions published by the NCES: http://nces.ed.gov/fastfacts/display.asp?id=76). Graduate degrees require another $120,000+ in
educational expenses (we used the average annual cost for graduate programs in
public and private institutions published by the NCES: http://nces.ed.gov/programs/coe/indicator_gsn.asp
)
A total for an undergraduate degree is $90,000 and for a
graduate degree maybe another $120,000.
What is the ROI for a Teacher vs a Broker?
|
|
Salary
|
Bachelors ROI
|
Bachelors and Masters ROI
|
|
Teacher
|
59,000
|
1.5
|
3.6
|
|
Broker
|
160,000
|
0.6
|
1.3
|
In other words it will take a teacher 1 and half years of
salary to pay off their cost of education for a Bachelor’s degree v a broker
paying it off in 7 months. But we all
know that lifestyles and related expenses may make the pay off process longer
for each category.
Broker’s cost of education is similar and in most cases
lower then the teachers’, which begs the question: What should your ROI for education be? Should it be focused on financial benefits or
should be qualitative focused on work-life balance?
By the way this may be another component of helping you
decide on a career path. Try to run a
realistic budget to determine if you can be happy living on $59,000 a year.
You can find a local Higher Education Reference Site here:
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