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This education option could save students thousands as college debt surges, says e-learning CEO

The student debt crisis is only getting worse. One expert talks about alternatives.  (iStock)

As the student debt crisis continues, many students are looking at alternative options to attending college, including learning a trade. One expert said that by learning a specified trade, individuals could wind up earning a much higher salary, considering the jobs available today without a college degree.

“Forty years ago over the course of the subsequent 40 years through today: yes, there’s a disparity,” said James Rhyu, CEO of e-learning company Stride. “But that doesn’t mean that over the next 40 years we’re going to have the same trajectory between college graduates and noncollege graduates when we put them on these paths like technology and healthcare.”

These rising fields often don’t require a degree, Rhyu said, and could end up saving the new generation thousands of dollars while teaching them a skill like coding. He explained that many students who do choose to go to college don’t immediately get their degree. By 2018, the overall six-year graduation rate for first-time, full-time undergraduate students who began seeking a bachelor’s degree at four-year degree-granting institutions in fall 2012 was 62%, according to the National Center for Education Statistics.

“I’m very confident, based on all the information we know today about the trajectory of college graduates, and economic situations in theory, versus people who go into some of these fields without college debt and start earning money immediately, the early indication of data supports what I’m saying,” he said.

Because of the diverse options in fields such as healthcare and technology, many students have new options opening up that they previously may not have considered. Those that do want to attend college also have more options in today’s low interest rate environment. Visit Credible to compare multiple mortgage lenders at once and find the rate that works best for you.

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College debt: By the numbers

Since spring 2020, the average student loan debt amount has increased by 1.6%, according to information from EducationData. The education research company found that although that average federal loan debt grew by 4%, private loan debt swelled much higher, by 12.66%.

Private student loan debt is averaging $54,921 per borrower, the data showed. When isolating just bachelor’s degrees, the average student borrows more than $30,000. And 20 years after entering school, some student borrowers still owe about $20,000 on their loan balances. 

The average student loan borrower pays about $250 per month, and some pay much more than this. One option available to student loan borrowers is a private student loan refinance. Visit Credible to compare rates and see how much you could save on your monthly payment.

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High school graduates can compare multiple options

Young adults emerging from high school now have more options available to them than previous generations, Rhyu explained. For example, they could start at a community college, go into the military or consider an apprenticeship. Here are some options they have: 

Take advantage of low-interest rates: Student loan borrowers who take out a private student loan now can save due to today’s historically low rates. Those who take out a student loan while interest rates are low could save thousands over the life of the loan. By comparing multiple lenders at once, student loan borrowers can choose the best rate for them and get lower monthly payments. Visit Credible to get preapproved in minutes without affecting your credit score.

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Learn a skill: For some, a four-year degree may not be the best option. Trade careers allow some to learn a skill right after high school and begin their career without college or with less college, such as an associate degree. And many entry-level jobs have salaries high enough to allow new high school graduates to start saving right away.

“It’s ideal if students in high school start to explore career options,” Rhyu said. “In addition to college, high school counselors have always tried to put kids on a path of ‘college is your best choice.’ And I think that in high school, kids should explore both options to determine which one is best for them. And if they have interests, to get them interested in healthcare, or certain areas of technology.”

To study for a specific career, teens can enter technical schools after receiving their high school diploma, or even get a full-time job as an apprentice to learn a trade.

Take a gap year: Rhyu said some students who are unsure what path they want to follow can benefit from taking a gap year to weigh their options and ensure they are making the best choice for them. During this time, they could explore their interests through volunteering in their local community or earning certificates and licenses in their field of interest, rather than pursuing a traditional four-year college degree.

“The other potentially reasonable option we’ve seen a lot of kids do this during the pandemic is, you see a lot of students that are taking gap years,” he said. “So, instead of going straight from high school into college, they take a year, do some study, figure out what may be best for them, and then see if college is right for them.”

If you decide higher education is right for you, taking out a student loan while interest rates are low could save you money. Contact Credible to speak to a student loan expert and get all of your questions answered. 

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

https://www.foxbusiness.com/personal-finance/student-debt-crisis-technology-healthcare-alternatives