We all know that career colleges and trade schools get a bad rep in the education industry. For many, they’re viewed as the “other option” or Plan B. What surprises me about these stereotypes is that the data available shows that career/trade school grads can make way more in the long run than students with a Bachelors or even Masters degree.
I was reading an article from CNN Money highlighting 7 college graduates, most of them with Masters Degrees, who were overwhelmed by student loans and underwhelmed by the job opportunities available to them after graduating.
Many of these individuals had 6 figure debt loads, with payments above $1500 per month in student loans, not to mention credit card and other forms of debt.
Using one of the examples, Erik Solecki, it’s not hard to see that he could have become immensely more wealthy as a truck driver than he ever will be as an engineer.
Mr. Solecki graduated from a top engineering school with about $185,000 in student loans. After what was probably 4-5 years in college, he spent another 9 months unemployed before finally securing a job for about $55,000 per year.
After reducing his salary by his monthly student loan payments of $1,800, his real, before tax salary is $33,400, less than the near $40K salary he could have made as a professional truck driver.
The next thing to consider is lost income while going to school. The average training program for professional truck drivers is 3-4 weeks, and the debt load for such programs is somewhere between $5,000 and $10,000. Many employers offer tuition reimbursement programs that take care of the cost of training over a period of time.
So while Mr. Solecki spent 4 years in school and 9 months unemployed, as a professional truck driver would have had 4 years and 8 months of income behind him, or roughly $186,400 in earnings. In the same time that it took him to get $185K in debt, he could have earned that much in salary.
There are other costly factors to consider when comparing the two. The debt-to-income ratio of the engineering version of Mr. Solecki is not favorable, and getting a home loan is going to be a challenge for many years. However, 4-5 years of employment with the same carrier, timely payments on credit card bills and a 20% down payment and the truck driver is going to have a fairly easy time applying to a loan for a $120K-$160K home.
While traditional forms of higher education are still a great option for those that can secure a full ride at college, the vast majority of people who attend college aren’t being told the true impact their decision is going to have on their lives. I think that more people need to be made aware of respectable and possibly more profitable career options available to them rather than being pushed to attend a traditional university.
After all, it’s true that money can’t buy happiness, but owing more than you make is an easy way to rent misery.