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Financing your education through loan or by leveraging your future earnings is not the problem. Cost of education is the problem. Here is why!

Cost of acquiring college degree is increasing faster than wages in most industries.

Education is considered as a tool that one can use to improve his or her quality of life; also, it plays a very important role in national economic performance for most countries across the globe.

Cost of acquiring a College degree has risen at both public and private institutions over the past years, due to this increase in cost, most students cannot afford to pay for their higher education.

This impact is particularly the case for low-income students. The families have increasingly turned to government and private loans to help finance their education.

They are generally struggling with the challenge of financing the increasingly steep cost of higher education that usually surpass whatever limited financial resources they currently have available to them.

Although price has become a bigger deliberation among students and parents, earning a college degree still remains a strong investment for most people.

The rising cost of higher education is currently a topic of large concern. Financing your education through borrowed loan or by leveraging your future earnings is not the problem.

Below are the reasons why the cost of education is the main problem that most people face when financing their education through loans or by leveraging future earnings:


Quality & diversity – Rising cost balanced against benefits of college degree

The main aim of Institutions of learning is to offer students with knowledge, skills and interpersonal competencies required for self-development, individual general life and contributions to national economy and society.

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This has resulted in most colleges and universities to offer more than one course, and frequently, different kinds of services to effectively quench the thirst of increasingly high demand for education.

The best education systems are the one that combine quality with diversity. The system should give all students an all-round opportunity for a better and good quality education.

The cost of acquiring a college degree is increasing faster than wages in most industries. According to experts, this has led to a huge gap between the rising costs of education and the Wage Stagnation.

Most college graduates find it harder to make ends meet while paying back a stupefying amount of student loans that they accumulated during their college years.

Others find it hard to find jobs due to quality of education or wrong choices of degrees that were financed by loan or leveraging future earnings.

For Students yet to begin their college education, they should be advised not to attend a private or institutions that charges higher fees, to study courses  that they don’t have any idea what they are going to do with the degree or maybe, becomes very difficult to get a job in the labour market.


For profit colleges – Private interest takes over institutions of learning

Most institutions of learning have transformed from offering education to business ventures – for profit colleges. These institutions are far more expensive than public universities.

Because everyone has to go to college, and the best college for that matter, for-profit colleges have capitalized on desire to make education more inclusive.

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These institutions are highly dependent on tuition fees from students. The profit will fall only if a good number of students are not recruited. At the end of the day, these profits are obtained from easily accessible government aid and private investors who use these institutions to make money.

Since the institutions are not providing the financial aid themselves, they don’t worry about whether the loan will be paid back in good time or not.  So, they have every reason to recommend students to take out as much financial aid as possible, without giving them the exact consequences awaiting them in the future.

These institutions offer flexible programs and degrees to students. They use distorted incentives to motivate students to enroll in their programs.

Now, because of the availability of financial aid and the flexibility of the programs, students are lured into for profit colleges programs that are very expensive as compared to their counterpart public universities.

In the larger majority of cases, students enroll in these institutions most of them never complete their degrees at all. One may opt out of the program due to the cost associated.

Also, higher fees paid to these for-profits institutions of learning is not the best investment for many. The cost doesn’t correlate with the quality of education.

After graduation, most graduates end up earning less at their jobs. This is contrary to their expectations when enrolling to these programs making it difficult to pay back the loan.



Key takeaway

Individual investment in higher education can be strongly rewarded, this is according to a study conducted by OECD.

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With a college degree commonly being a basic requirement for professional jobs, not graduating from college can put job seekers at a major disadvantage in the job market.

Societies with skilled individuals are more than ready to respond to the current and future potential crises. Consequently, investing in education for all, and in particular for families from disadvantaged backgrounds, is both fair and economically efficient.

Nevertheless, as the cost of college continues to increase and student debt becomes a national concern in many countries people have begun to question if college is worth the cost.

various programs and methods for financing an education luckily exist to help the aspiring student obtain the education they desire or require. These methods are considered by many even though quality program tuition fees can easily run into thousands of dollars per year.

Apart from providing financial aid, education loan programs can also have a favorable influence on the quality of education through the Worthiness standards imposed on both beneficiaries and participating institutions.

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