This article may include partner links. If you click, visit or buy from these links, we will receive a fee or products from the companies mentioned in this post. Please read our disclosure policy for more details.
STUDENT LOAN HISTORY
In a recent article by Jillian Berman of Marketwatch.com entitled “How we got to $1 trillion in debt: An illustrated history of student loans in America” showed an interesting history of the origin of the student loan.
In the article’s graphic, it illustrated how in 1204 at Oxford University, officials at some of the most prominent European colleges saw the need for poorer students to find a way to finance their education, so they set up chests where students placed valuables, mostly books, as collateral to afford their school fees; this became known as the “chest system”.
It was preceded by the ‘Benefactor’ model in 1643 at Harvard University where scholarships were first introduced, bankrolled by wealthy individuals. It lasted until 1838 when also at Harvard University, the first lending agency was created to finance student’s education.
This lending structure ultimately became the precursor of the modern student loan system.
WHAT IT IS TODAY
Fast forward 2017, according to a Forbes article by Zack Friedman entitled “Student Loan Debt In 2017: A $1.3 Trillion Crisis”, the ballooning student loan debt crisis is predicted to be the biggest bubble that is threatening the US economy in the near future.
According to the article, there are more than 44 million borrowers with $1.3 trillion in student loan debt in the U.S. alone. The average student in the Class of 2016 has $37,172 in student loan debt, and nearly seven in 10 seniors (68%) who graduated from public and non-profit colleges in 2015 had student loan debt.
Having first-hand experience with borrowing for my graduate school education, and being encumbered now for the past 8 years, I wish I had known or that someone would have told me that for the career I was targeting, which was Information Technology (IT); there are multiple paths that are way less expensive, and would have resulted in the same pay and career advancement over time.
LEARNING ALTERNATIVES
One alternative is via the Community College route. Take Los Angeles Trade Tech College as an example, where they offer an Associates track in IT for as little as 45 units ; and with an in-state per unit cost of $46, students can earn their degrees for less than $3K.
That’s a real bargain considering the average cost of tuition and fees for the 2016–2017 school year was $33,480 at private colleges, according to the College Board.
Another growing trend among younger millennials are online boot camps. Most of these boot camps are very cost-effective and almost nearly free; examples are coursera.com and codeacademy.com. Also, due to the growing need in this sector, some coding boot camps even pay for students to attend their classes and guarantee a job once they finish.
As students ultimately get hired and gain needed experience in their fields, I would recommend that investing in industry certifications be the next step. This is to ensure progressive pay and consistent salary increases down the road.
In a 2015 survey of top paying certifications, IT Certifications that did not require 4-year degrees were at the top of the list.
WRAP-UP
There are lots of options out there for education, as well as information on how to navigate them.
The key is to take time, research, find the best alternative path, and to not rush.
Time is money so they say but if you take the time to figure out the best and most cost-effective educational path for you, without going into debt, you will certainly save money, even though you may think you’re losing time in the process.
I wish I knew then what I know now, that there are better and cheaper alternatives besides getting an expensive education 🙁
Do you have other educational alternatives that are worth sharing? Please leave a comment below or email at thedebtfreejourney@gmail.com
Thanks for your time and God Bless you All.
Leave a Reply