A New College Tradition: In Debt and Underemployed

College campuses are well-known for their annual traditions, but one of these “traditions” is neither a source of pride or school spirit. This ritual has sorely diminished the value of education for most college graduates across the country. I am speaking of the annual tuition increase and the impact it has on students. The insatiable budgets of most colleges have resulted in annual hikes in student tuition that exceed the rate of inflation. This disconcerting trend has been readily apparent for the last 30 years, as documented by the College Board.

As colleges spend more each year, they require more revenue; and as long as students are willing to pay more, college prices continue to balloon. Students are simply taking out larger loans and assuming more debt. Student loan debt hit an all-time high in 2016. The average 2016 graduate owed over $37,000. This figure has increased an average of six percent per year for the past six years.

College students are paying more for their education each year, but are they really getting more for their money? Again, the statistics would say “no.” While the number of college graduates in the U.S. has steadily grown each year since the start of the recession in 2008, they are reporting themselves to be unemployed and underemployed in higher numbers. The Federal Reserve Bank of New York found that nearly half (45%) of new college graduates were working in jobs that did not require a bachelor’s degree.

With more college graduates settling for unskilled labor positions just to stay afloat in this troubled economy, how has this affected them? In two words: “low wages.” The number of college graduates working minimum wage jobs has more than doubled since the recession started. According to the Bureau of Labor Statistics, last year, 272,000 college graduates were working at or below the minimum wage.

Now, let’s put all the pieces of this academic puzzle together. With fewer employment opportunities in this economy for persons without a college degree, more young people are looking to improve their odds by going to college. With more students enrolling in college, operational costs on college campuses increase and those costs are often passed along to students in the form of higher tuition.

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Davis & Hodgdon is a full-service public accounting firm with offices in Williston and Rutland Vermont. The firm is a member of the Vermont Chamber of Commerce, Vermont Businesses for Social Responsibility (VBSR), Vermont Business Environmental Partnership (VBEP), Lake Champlain Regional Chamber of Commerce (LCRCC),  Women Business Owners Network (WBON).  The firm serves its clients by providing progressive, proactive services through expert staff, sophisticated technology, and unparalleled efficiency.

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