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Should You Skip College to Save Money?

Stefanie O'Connell

With the average student loan debt in the United States at $33,424 this month, it's no wonder the worth of college has been called into question.

A February Pew Research Center survey, however, offers some solace to graduates holding diplomas that saddled them with tens of thousands of dollars of debt. The findings show that on virtually every measure of economic well-being and career attainment, from earnings to job satisfaction, recent college grads are outperforming their "degree-less" peers. More specifically, the study of more than 2,000 millennials found that college graduates ages 25 to 32 working full time earn about $17,500 more annually than their high school diploma-only counterparts. Over the course of a 40-year career, that's an additional $700,000! Suddenly, $30,000 worth of student loan debt doesn't seem like such a bad investment.

These numbers, however, can prove deceiving. In a 2011 study, economists Stacy Dale and Alan Krueger, found that people who apply to Harvard University and are rejected earn roughly the same amount as people who graduated from Harvard. These findings suggest that it isn't necessarily the college education that creates talent or success; rather, it's the fact that those who attend college are, on average, smarter. In other words, it's not attending college that makes someone more likely to be employable or earn a higher wage; it's the characteristics of people who pursue higher education that allows them to succeed.

Taking those successful characteristics and channeling them into a more affordable kind of education might be a more cost-effective solution for many of today's prospective students.

According to the Department of Education, the average cost of tuition, room and board at a four-year college is $20,986 annually. At a community college or trade school the annual cost averages $8,451, and because those programs only require two years of study, there is an average savings of $67,482.

Vocational programs, once seen as inferior to the four-year traditional college experience, are becoming an increasingly attractive option, not only because of significantly reduced costs and less risk of a lifetime in debt, but because of the solid and immediate career prospects that follow.

The reason trade schools and vocational programs are so effective is because they offer hands-on skill training in high-demand fields. While many bachelor's degree programs turn out academically well-rounded job candidates, they often lack the practical, marketable skills that trade schools teach so well.

Perhaps, when considering return on investment in higher education, the appropriate comparison isn't college versus the alternatives, but how much you spend on school or training versus how much you can expect to earn as a result of that expenditure. In making that earnings assessment, your choice of major, skills and expertise becomes far more important than your place or means of education.

According to a 2011 Georgetown University study, 63 percent of science, technology, engineering and mathematics workers with associate's degrees earned more than non-STEM workers with bachelor's degrees. Even a master's degree didn't guarantee that non-STEM workers would pull ahead in earnings. Unfortunately, four-year degrees in English, sociology, art, philosophy and a host of other non-STEM majors, generally don't translate into high-paying jobs, regardless of university "prestige."

To help ensure that the benefits of education and training, at college or otherwise, will be worth the cost, do some research on career trends and in-demand skills. Companies such as Glassdoor and Salary.com give a projection of likely salaries that graduates of a particular program can expect. Depending on that, students can calculate how much money they can reasonably afford to borrow and make a more informed assessment of what kind of education is and isn't worth it in the long run.

Stefanie O'Connell is a New York City based actress and freelance writer. She chronicles her struggle to "live the dream" on a starving artists' budget at thebrokeandbeautifullife.com.

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