Untit<br><br>Meet College Joe. He attends a four-year university and is going to graduate
in May. Unfortunately, College Joe had to take out a lot of loans to pay for his
education. When he graduates, he'll be roughly $21,000 in debt.
What's worse is that College Joe has no "real world" job prospects. In fact,
he's been hearing from most of his peers that the job market is a tough place
right now. He also hears that graduate students can defer ALL of their loans
while they're in school. So what does College Joe do? He starts studying for the
GRE in hopes of going to graduate school after graduation.
College Joe seems like a smart enough guy. After all, he's graduating in four
years. And during his senior year, when the biggest concern is typically which
kegger to attend, College Joe is thinking about his finances. But going to grad
school to avoid paying off student loans isn't necessarily the brightest idea.
Yet, many College Joes are jumping on board.
During the past ten years, the cost of college has risen 83% while the wages
for college graduates have only increased by 38%. To top that, the projected
growth of entry-level jobs for college grads in 2009 is 1.3%, compared to 14.3%
for the Class of 2008. No wonder students are heading toward the safe haven of
graduate school.
But is it the best choice? Many career guidance counselors at colleges say
absolutely not. Students going straight to graduate school from college will be
setting themselves up with more debt and less marketable work experience. In
fact, master's candidates at University of Wisconsin-Madison graduate with
roughly $31,000 in debt while PhD candidates graduate with almost $33,000. Add
that to your $21,000 from your undergraduate years and you've got yourself a
lot of debt.
College students need to ask themselves if going to graduate school will help
them achieve their desired salary and whether or not it will be enough to repay
the debt.
They should also look at increasing their employment options through specific
public-service opportunities. Programs like AmeriCorps, the Peace Corps, and
Teach for America provide stipends for "employees" while the government defers,
or in some cases forgives, student loans. Also, the government offers loan
forgiveness for military service or for doctors, nurses, or teachers working in
high-need areas.
To get an idea of how much you'll owe after college, use the FinAid Student
Loan Advisor to figure out projected monthly payments for your student
loans.
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