With commencement season in full swing, many near and recent college graduates are beginning to ponder how they will pay off the debt they’ve accumulated along the way. A new report reveals their expectations may be far from reality.
Cengage, an educational services company, surveyed 2,500 recent and upcoming graduates and dug into existing public data for the Student Opportunity Index, which measures 17 opportunity indicators across four categories: employment, economic, social, and personal well-being.
According to the report, recent grads believe they will have their debt (averaging about $22,919 upon graduation) fully paid off in six years. Unfortunately, statistics from the Department of Education reveal that a more realistic number is 20 years. The One Wisconsin Institute even estimates the average length of repayment at a little over 21 years.
One explanation for this optimism is trust in the job market. Four out of five students are optimistic about their future, and 61% believe they will be better off than their parents.
While Gen Z-ers face a friendlier economy than their millennial counterparts, most upcoming and recent graduates have complete faith that job opportunities will match their qualifications.
More than two-thirds expect to meet their salary expectations within a year. About 88% believe the number of available jobs in their field of study will increase in the next two years, and 93% expect to land a job related to their educational background within six months of graduating. In reality, this number is closer to 60%.
Another report from LendEdu found that college students, on average, expect to earn $60,000 in their first job out of college. The reality is that the average starting salary for graduates is closer to $50,000.
While college has its value, too many students either don’t understand the cost of living or they’ve been sold a lie by their high school and college counselors. Under the Trump administration, the economy is roaring back to life, but the job market doesn’t typically adapt to the workforce. The workforce must adapt to the job market to ensure its own prosperity.
This is why the skills gap is such a frustrating conundrum.
Although middle-skill jobs (which require some training, but not a four-year degree) account for 53% of the country’s labor market, only 43% of U.S. workers pursue training for these jobs. Writers for Vox and the Washington Post have vehemently denied that the skills gap exists, but the data couldn’t be clearer. These kinds of positions can pay up to six-figures from the get-go, and still many remain unfilled.
Commencement speakers often tell graduates to follow their dreams. If they really want to pay off their debt in six years, they might be better off “following the money” instead.
Brendan Pringle (@BrendanPringle) is writer from California. He is a National Journalism Center graduate and formerly served as a development officer for Young America’s Foundation at the Reagan Ranch.
