In May, Cengage, an education and technology company serving the higher education, K-12, professional, library and workforce training communities, published a report detailing research done on topics such as graduate employability, perceived value of higher education and degree stigma. The findings came from an online survey conducted March 2 – 12, 2021 with 1,600 working adults.
One takeaway that financial aid administrators should note is that respondents feel that excessive student loan debt has taken away their financial independence. While 64% agreed having a degree increased earning potential, about a quarter reported feeling like they are not financially independent; more than a third reported not having started a retirement account; and nearly half had not bought a home. Couple these findings with those related to job preparedness (two in five respondents said they rarely if ever use the skills learned in college; one in three said it took six months or more to find a job after graduating; and one in five said they were not given the skills in college to perform their first job) and it is understandable why students are reluctant to take on student loan debt or even attend college.
In 2019, we shared recommendations from The Urban Institute to overhaul the College Work-Study program in order to allow students to develop more marketable skills while still enrolled; however, even if implemented, these recommendations will not serve to change perceptions of the value of higher education in the near term. There are two things we can do, though, to help current and prospective students to see the value of receiving a degree even if they have to borrow to do so.
First, we can’t repeat enough the higher earning potential college attendees enjoy compared to those with a high school diploma. According to Indeed’s March, 2021 article on the topic, not only does annual salary increase with additional education beyond high school, but also unemployment rates fell as well – this should provide some peace of mind that those who attend college are better able to weather economic downturns. More importantly, we need to make clear that the benefits of borrowing for college (when done wisely), far outweigh the negatives. Not only is it a good way to start building a credit history – much better than credit cards! – the payments terms in the federal loan programs are very flexible, even allowing borrowers to pay based on income rather than the outstanding loan amount.
Our best opportunity to influence the public perception of the value of higher education, particularly given the negative feelings toward student loans, is to participate in community events that encourage college attendance – financial aid nights at high schools, FAFSA completion events, etc. – and spread the word. For our own students on campus, we need to go beyond the minimum requirements for entrance counseling to help them make smart financial decisions that will minimize indebtedness. The Financial Aid Office is hard-pressed to take this on alone, so it’s a good opportunity to partner with other student services like Admissions, Freshman Experience/Orientation and even faculty to create programming that will reinforce the value of the investment while teaching critical financial literacy skills.
See our blog for some ideas about creating a financial literacy program or contact us at firstname.lastname@example.org to get help creating your own program.