Student loans have surpassed credit card debt and are now the second largest source of household debt in the United States… second only to mortgage debt. Is this leading to a decline in household wealth? Several recent studies have examined the topic and it seems that the amount of debt is not as important as the college degree that came with it.
For example, young adults who graduate with degrees in business, law and medicine tend to have very high debt burdens. However, their degrees tend to lead to jobs with very high incomes.
On the other hand, young adults who have either dropped out of college or who have graduated with degrees in lower paying fields end up with lower paying jobs. This would cause even a small amount of student loans to be burdensome.
A recent study conducted by Georgetown University found that top paying college majors earn a staggering $3.4 million more than the lowest paying majors over the course of a recipient’s career.
Moral of the story? Examine the earnings potential of the degree you want before you get into debt to acquire it.