As the turbulent economy drives up student loan defaults and college graduates struggle to enter the job market, an increasing number of students are gambling on less-expensive schools and courses in trying to avoid having to take on massive debt, writes Melissa Korn at the Wall Street Journal.
A report of about 1,600 students and parents from student-loan company Sallie Mae shows that more students are choosing lower-cost public colleges or commuting to schools from home to save on housing expenses.
Families across all income brackets are spending 9% less on college in 2010-11 than in the previous year, according to the report. High-income families cut their college spending by 18%, to $25,760.
Having a college degree undeniably gives candidates an edge in the job market. And the stats back it up. The unemployment rate for people with a bachelor’s degree was 4.9% last month, compared with 10.5% for high-school graduates with no degree, according to the Bureau of Labor Statistics.
“When an employment recruiter looks at an Ivy League degree, they will usually look at it more carefully,” says Elena Bajic, founder and CEO of Ivy Exec, an online executive job search site, reports Mark Koba at CNBC.com.
“An Ivy League education makes a candidate stand out, even before a recruiter talks to them.”
Besides a high-profile degree, Ivy League schools provide a social network that other schools can’t duplicate—emphasizing it’s who you know as much as what you know, says Brian Eberman, CEO of StudentAdvisor.com, an education comparison site.
“From an undergraduate perspective, the primary advantage of Harvard or Yale is the connections that college creates between the students and their peers,” Eberman explains.
“Those connections can be quite valuable over time when it comes to jobs and salaries.”
But a degree from a private college also is expensive and piles on debt. The average debt load for students who took out loans hit a record $27,200 for the class that graduated this year, says Mark Kantrowitz, publisher of student-aid websites Fastweb.com and FinAid.org.
That comes as general per capita debt reached $47,260 in the second quarter, a figure that has been dropping in recent years, according to the Federal Reserve Bank of New York.
Good news for those students that are trying to avoid these huge debts – not everyone who wants to climb the corporate ladder needs to be an Ivy Leaguer. And that’s according to Katherine Cohen, CEO and founder of IvyWise, a private college admissions counseling company based in Manhattan.
“Some of our nation’s political leaders and Fortune 500 CEOs have come out of Ivy League schools, but there are still many more who did not and succeeded,” Cohen explains. “Employers are more interested now in what a student has made of his or her college experience.”