The Graduate


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Ogden Nash once said, " Some debts are fun when you are acquiring them, but none are fun when you set about retiring them ." As the year comes to a close, the graduating class of 2011 will experience the not so fun part of debt as they begin the repayment period of their student loans. The six month grace period that they received after graduating will end this November, and they will be forced to begin making payments on the debt that they acquired over the last four or more years of school. Many graduates are worried about their ability to repay the balance of their loans.

The Project on Student Debt , an organization dedicated to making college more accessible and affordable for Americans, recently released a report stating that the average college graduate in 2010 had over twenty five thousand dollars in student debt. While this number is staggering, the truly devastating number is the 9.1% unemployment rate of recent college graduates. For decades now, Americans have preached that if you get a college degree, you will get a better job and make more money. It is difficult to keep encouraging young Americans to take on large amounts of a debt for a degree that can't guarantee them a job or even more pay in the current economy.

Another frightening statistic is the amount of student debt that Americans as a whole have acquired. The Federal Reserve Bank of New York reported that students borrowed over $100 billion dollars last year and this year, the total amount of outstanding student loans will exceed $1 trillion dollars. This also means that Americans will have more outstanding student loan debt than credit card debt.

If you are trying to decide whether or not college is a good choice for you or a loved one, you should consider a college education as an investment and take the time to do some research on the risks and benefits. I would recommend that you have a pretty good idea of the area that you want to study and research the starting salaries of potential job opportunities that you would be qualified for in the field you wish to study. This will allow you to see the Return on Investment for your college degree. After you consider the salaries of potential jobs, you should begin looking at different schools that offer a program in the field you wish to study. It is important to find the best possible program for the best price.

If you are unsure about what you would like to study, going to a community college to do some of your general education classes is a great place to start. Once you grasp a better idea of a potential degree to work towards, you can transfer to a bigger university. There is an argument on whether or not good debt exists. Many advisors consider student loans a form of good debt. I would agree if there is a strong potential for you to obtain a job that can easily allow you to pay for your student loans after graduation.

It is easy to assume that you will be competitive in the job market if you have a college degree. As we have seen with the 9.1% unemployment rate for recent college graduates, this assumption is not something to rely on. When you do decide to start working towards your degree, make sure that it is investment that will be able to serve and provide for you in the long-run. Otherwise, the not so fun part of paying debt will never pay-off.

The intent of this article is to help expand your financial education. Although the information included may be relevant to your particular situation, it is not meant to be personalized advice. When it comes to investing, insurance and financial planning, it is important to speak to a professional and get advice that is tailored to your unique, individual situation. All investments involve risk including possible loss of principal. Investment objectives, risks and other information are contained in the Snider Investment Method Owner's Manual; read and consider them carefully before investing. More information can be found on our website or by calling 1-888-6SNIDER. Past performance is not indicative of future results.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , College

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