According to a 2017 report by the Board of Governors of the Federal Reserve System, the average level of debt for student loans is $32,731 per student. This number can be intimidating and may leave you wondering if the cost to get your education will be worth it in the end. To ensure that you’re making the right financial decision for your future and don’t become a statistic in the unemployment rates, it’s essential to calculate the value of different subject fields and which one will set you up long-term for success.
Review Future Demand for the Occupation
Visit the website of the Bureau of Labor Statistics and review the Occupational Outlook Handbook. This guide lists a large number of career fields and provides insight into future demand for these fields. Understanding anticipated future growth will help to ensure you pick a program that will offer job opportunities when you graduate. You can also learn more about average wages for the field and calculate out your lifetime anticipated earnings by taking the average salary times 40 years.
Calculate the Cost of Receiving Your Degree
Once you know your potential lifetime earnings, it’s essential to determine what it’s going to cost to get your degree in this field. Start by adding together the basics, such as tuition, student fees, and books. Think about how you will pay for other costs, such as housing, transportation, clothes and even social activities. All of these factor into what it will cost you to earn your degree.
Explore Options to Offset the Cost of Your Degree
Consider what financial aid opportunities are available to help you offset the cost of a college degree. This could be scholarships or grants. When factoring in financial aid, you should not include student loans in the calculation. These loans don’t offset the cost of college. They only delay paying for it. Once you’ve determined what financial aid will be available, subtract this from your overall degree cost. This new adjusted cost is what you will pay to earn your education.
Calculate Your Return on Investment
With your adjusted cost to attend college and your lifetime earnings, determine what your return on investment is to get your degree. For degrees that traditionally span four years, your calculation should be your lifetime earnings minus your adjusted cost to attend college. You can calculate your return on investment (ROI) percentage by taking your adjusted cost to attend college divided by your lifetime earning potential.
Once you’ve calculated one ROI for a degree program, you can see how it compares to other career fields of interest by repeating the above steps. By comparing multiple programs and their potential costs and earnings, you can determine which program is the best option for you.
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