The Job You Want, the Pay You Deserve, and the Education You Can Afford

Thoughts from a recent Lifetime Income Series podcast, which you can listen to in full at Financial Sense Newshour here or on iTunes here.

Parents and children alike are faced with a number of daunting questions when it comes to higher education. If you’re a parent with a teenager graduating from high school, you may be thinking whether you can afford to help send your child to her future alma mater. Moreover, will she be able to support herself when she graduates? If you’re a high school graduate with the world at your doorstep, you’re likely wondering if all that debt is really worth it and what kind of salary you’ll need to make to pay it all back.

At the end of 2014, the national average for student debt was $30,000 per student. With 70% of college graduates owing an average $28,400, the steep cost of an education has wide-ranging consequences, not just for individuals but for the broader economy as well. Many college graduates are putting off the purchase of their first home. As consumers, their purchasing power is diminished.

If you’re a young person considering a college education, one of the first things you should do is properly position yourself to land a well-paying job after graduating. A liberal arts or sociology degree is not what it used to be, and graduates with this type of degree rarely make enough to service the debt they’ve acquired. The key is to focus on an in-demand career field. Jim Puplava, founder of Financial Sense and Chief Investment Strategist at PFS Group, cites a recent study which concluded that 14 of the top 25 in-demand jobs are in the medical field. Careers in this field range from physician assistant to more specialized roles like sonographer, audiologist and nutritionist. Other careers in the top 25 include IT professionals, market research analysts and industrial engineers. Jim explains that the majority of the top 25 careers are technical or scientific in nature and require a higher education.

Beyond evidence of strong demand for qualified individuals within a chosen field, graduates should consider the expected salary, especially if you’ll be taking on debt. A recent report by CNN claims that the top 100 highest-paying career fields include software architect, videogame developer, hospital administrator, clinical nurse specialist, dentist and pharmacist. Jim breaks it down further, pointing out that the most high-paying careers for women include sales engineer, astronomer and physicist, petroleum engineer, economist and aerospace engineer.

Regarding education itself, prospective college students need to take the time to carefully assess the value vs. costs in attending one college over another. Jim references a list published by Money magazine that cites Stanford University as the #1 college in the U.S. with an average total cost of $280,126. Rounding out the top 5 schools are Babson College, Princeton, California Institute of Technology and Harvard. Unfortunately, even with student aid, the average tuition at these schools tops $100,000. Furthermore, starting salaries for graduates are not necessarily higher than those who graduate from less prestigious schools.

Rather than focusing only on top-rated schools, we recommend consulting a second list, also published by Money magazine: The 50 Best Colleges You Can Actually Get Into. These states schools, which typically boast a higher acceptance rate and more reasonable tuition costs, include Texas A&M ($84,732 average tuition cost), University of Washington, Virginia Polytech Institute and Martin Luther College in Minnesota.

Alternatives should also be considered. Jim is a strong proponent of the “2+2” program, which calls for two years at a junior college and two years at a state school. This limits tuition costs to $40 – 50,000 rather than the $80 – 100,000 often required for direct entry into a four-year program. Other students may benefit from going to work straight out of high school and earning a degree online. This scenario not only helps a student earn valuable work experience but allows him to test the waters of his chosen field and be sure it’s a good fit.

Jim also discusses the case study of a young woman, Jennifer, whose academic achievements gained her entry to a top school with a high price tag. She wanted to become teacher, a career field not known for commanding a high salary. Jennifer’s parents didn’t have the savings to pay for her education and weren’t willing to leverage their house to make it happen; but they were also concerned about the debt she would incur to pay for her education herself. In the end, they convinced Jennifer to stay at home and start with junior college. The case study serves as a good example of parents and a child working together to plot a realistic path on common ground, a solution that we at Financial Sense wholeheartedly endorse.

Also in this podcast was a fascinating discussion with Dr. Jeff Volek, a world-renowned expert in low carbohydrate research and its application to both type-2 diabetics and athletic performance. Dr. Volek is the co-author of The Art and Science of Low Carbohydrate Living. His portion of the above broadcast starts at 34:09.

Listen to any of our seven podcasts each week on finance, economics, and the market on the Newshour page here or on iTunes here. Subscribe to our weekly premium podcast by clicking here.

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