This is a guest post from Jamie of Eventual Millionaire.
Last week Daniel talked about Student Loans, and I wanted to follow that up with some information about situations he didn’t discuss. We found out that for the average student, taking out loans is worth it, but what about if you end up switching careers like I did?
If You Switch Careers, Are Student Loans Worth It?
If you plan to stay in your field forever, it is a good idea to get a college degree.
But the average person switches careers between three and seven times. If you end up being someone who changes careers shortly after college (like me!) then your degree might not be worth it. Be careful of the more affordable online degrees as well considering you may be changing jobs sooner than later.
Another thing to consider is the loan forgiveness that you can receive under certain circumstance. Those who enter into a public service career are eligible to receive loan forgiveness as long as they stay with the job for at least 10 years.
Every month, your payments are determined on a sliding scale based on the size of your family and your current financial situation. While this method of repaying a loan is not for everyone, it is nice to know that it is an option for anyone who plans to work in nursing or community outreach in the future.
How can you tell if your degree is worth it if you switch careers?
Let’s look at me:
My IT degree from the Rochester Institute of Technology came with $49,000 in student loans.
Two and a half years after graduating college I changed my mind. I did not want to be in the Information Technology sector anymore. So…
Was My College Tuition Worth It?
I spent $49,000 on the degree after scholarships, and not including room and board. My parents took loans for about $19,000 of it and I took loans for $30,000.
I worked very hard and was lucky. The salary of my first job out of college was $100,000. It was a ridiculously good salary, and a big improvement from my previous job of $40,000 a year.
But I switched careers two and a half years later. I became a personal and business coach where you do not need a degree. My salary plummeted when I started working for myself. The first year I made about $6,000 working part time.
Was my college tuition worth it? Surprisingly YES.
It was worth it because I paid off all of my student loans within those two and a half years. If I had spent all of the money I made during that time, and had student loans hanging over my head for 20 years on a small income, it would be a struggle.
It was also worth it because I now know that I can make six figures, and the belief that I can do it again is helping me get there. I also have all of my IT knowledge which has helped me in so many other aspects of my life.
I also had the opportunity to quit my corporate IT job and switch careers because I paid off all of my other debt. That college degree gave me the opportunity to make an incredible income so I could pay off all of my debt (excluding the mortgage). If I had never gotten the degree, I would have had a smaller salary to pay off my car, and home equity loans.
If I could go back I wouldn’t decide not to get it, but I would definitely have taken more time before deciding what I really wanted to do with my career and skills. I wish I would have gotten a coach or someone to help me through the decision too, since I just picked the degree because I was good at it and it made a lot of money!
The Recommendation: Before You Go to College
My biggest recommendation is to take your time to think and research before you decide. Before you sign the papers to get a loan, go to Salary.com and see how much people in that field make. Try to imagine yourself doing that field for 20 years. Determine if you are really ready to work for your education.
A higher education is one of the best gifts you can give yourself. You’ll want to try it on before you buy so you can make sure it’s the right size and color :)
For more from Jaime check out her blog Eventual Millionaire where you can join the journey to become a millionaire while living your ideal life style.