Consumers: College Enrollment: Downstream Effects of COVID, Inflation and Technology

The pandemic has influenced the perceived value of a higher education. However, this merely put the spotlight on an already growing trend. For instance, U.S. student loan debt increased by more than 100% from 2010 to 2020.1

Now, because of the limitations imposed on classroom and on-campus activities, augmented by online learning opportunities, many of America’s college students have become further disillusioned by their collegiate prospects. This is exemplified by nearly 1 million fewer students enrolled in college since the beginning of the pandemic.

On top of these woes, college campuses are having to increase tuition and fees to pay for higher inflation. With lower enrollments, universities still have to pay rising prices for food (on-campus dining options), energy (dormitory living) and much more. Today’s extremely competitive labor market is also requiring universities to raise wages and benefits for professors and non-academic staff. Some educators have even begun forming labor unions to demand higher income to keep up with the cost of living.2

Managing money is about choices. Sometimes we have no choice but to cut back on expenses, but we do have the choice on what expenses we reduce or eliminate. We also, to some extent, have choices when it comes to how much money we earn. Particularly in today’s employment market, many people have the option to at least explore other available jobs and consider any additional pay or benefits that would enhance their lifestyle and savings options.

If you haven’t thought about that, now is a great opportunity to do so, given the number of available jobs. Another option is to work with us to find ways to add more financial confidence to your life. By positioning assets for reliable income in your future, you may be able to explore other options — in work or lifestyle — that you may not have thought were available to you. We would be happy to discuss your financial needs for both today and tomorrow.

One new study found that the positive correlation between a college degree and getting a good job depends on how much student debt a graduate is carrying. In other words, even a high-paying job cannot offset the long-term financial effect of paying off high student loans. The negative ripple effect still impedes that college graduate’s ability to build wealth through saving money, investing and buying a home.3

In fact, one downstream consequence of today’s job market is that employers are starting to take the college degree requirement out of their job listings. In short, “not having a college degree should not diminish your chances of securing a good job.”4 Today’s young adults also have a technology advantage, having grown up in the era of internet and smartphones. They can use their social media profiles and posts to convey their technology skills and knowledge, particularly in fields where they have specific passions and interests.

Consider another downstream detriment to colleges — having to reduce classes and degrees with low enrollments to trim costs. They will increasingly focus on high-demand classes, which may well include tech and media majors. These are skills and knowledge that can be learned through persistent exposure and interaction while still in high school. Combine inherent social uses with hybrid learning models, and many of today’s higher-level jobs may be filled by motivated and tech-savvy high school grads.

Content prepared by Kara Stefan Communications.

Abigail Johnson Hess. CNBC. Dec. 22, 2020. “U.S. student debt has increased by more than 100% over the past 10 years.” Accessed March 4, 2022.

John Marcus. NBC News. Feb. 6, 2022. “Tuition, fees continue to rise as pandemic inflation woes hit colleges.” Accessed March 4, 2022.

Chris Melore. Study Finds. Feb. 8, 2022. “College is no equalizer? Study finds student debt still holds low-income graduates back.” Accessed March 4, 2022.

Jeff Mazur. Harvard Business Review. Aug. 11, 2021. “You Don’t Need a College Degree to Land a Great Job.” Accessed March 4, 2022.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.3/22-2085611BThis entry was posted in Blog PostsIO Content and tagged IO. Bookmark the permalink.

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