College or Not to College?
What do the stats in South Dakota suggest?
Deciding whether or not to attend a four year college is a complicated question. It depends on what a person wants to do, how long he/she can afford to stay out of the workforce, and how much debt he/she is willing to accept.
A college graduate in South Dakota earns an average of $41,000. The average cost of South Dakota State is about $18,402 per year ($73,608 for four years) and the average cost of the University of South Dakota is $18,378 per year ($73,512 for four years). Assuming a person is willing to make loan payments of around $550.00 per month and the interest rate on the loan is about 6.5% he/she would be able to pay off the debt in about 20 years. However, paying $550 per month might be a bit challenging depending on the starting salary.
On the other hand, tradespeople earn an average of $57,000 - $67,000 in South Dakota (electrician avg. $60,000, finish carpenter avg. $57,010, plumber avg. $67,414). These positions do not require a college degree which means there is no need for debt. Some people who choose these careers options can afford a house shortly after graduating from high school.
Nursing offers some middle ground. People can get a two-year nursing degree at a technical college. These positions pay an average of $63,221. The cost of Southeastern Technical College is about $15,186 (much less if the student lives at home), which means the maximum cost would be about $30,372 to get into the workplace. This is a more manageable debt load. And the average pay is about the same as the trades, so the financial picture is rosier.
If someone’s parents saved money to pay for their child to attend a four year college, would it make sense for him/her to attend? Maybe. If the person is interested in a profession that has a higher average wage than the trades, it probably makes sense. If not, it could be better to consider a non-college option.
Bill Gates (Microsoft) and Steve Jobs (Apple Computer) both dropped out of college and did very well. As a result, finding the best financial option based on a person’s interests is more important than following a specific path.
Our world needs more builders & tradesmen
Knowing all of this, we continue to send our children to college. Why?
I talked to my plumber last time we had some work done, and he told me they can't find anyone to take a job.
Starting pay for a manufacturing job is over twenty dollars an hour, and tuition at a private college is more than the total cost of attending a state school.
This is unsustainable, and as the very wise Economist Herb Stein once said, "If something cannot go on for ever, it will stop."