American Investments in Higher Education and Reducing Student Debt

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Updated: Nov 22, 2022
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“Our higher education system is one of the things that makes America exceptional. There’s no place else that has the assets we do when it comes to higher education. People from all over the world aspire to come here and study here. And that is a good thing.”
~Barack Obama Experience
As the quote from President Obama above points out, higher education in the United States is now essentially the epitome of American achievement. Although his point is more in regards to how the United States relates to the rest of the world in terms of the quality of higher education, personally the quote means something entirely different to me: success in America means earning a college degree and gaining employment that requires a college degree. For a teenager, that sounds pretty good, so I decided to go to college. It is the ‘thing to do’, after all, and it seemed that long-term success would be dependent on this short-term decision. I decided to pursue Business for a very similar reason. The social sciences did not seem to hold much promise in terms of compensation after graduation, and I was not about to go the pre-med route to become a doctor. So, instead, I chose to become a Business major. The name itself implies that the classes in the major will teach real life, practical skills that can be applied in a business setting right after graduation and in the years to come., my experience has largely aligned with these promises and associated expectations of practical skills and business knowledge that would prove to be applicable after college.
More than that, as my time in class went on, I have slowly become aware of a secondary benefit of my investment in education: the value of critical thinking. As one academic source states, “Critical thinking is often considered an essential learning outcome of institutions in higher education” (Holt et al., 2015, n.p.). I believe that the value of learning how to think critically, learn a concept, and even work hard will all have equal value as practical business acumen upon graduation. But what kind of investment have I actually made? Thankfully, my
*investment’ is less than the average student borrower. As of 2016, the average new college graduate has just about $35,000 in student loan debt – and that does not even include a graduate degree (Sammer, 2016, n.p.). I have been taking out just about $8,000 per year in student loans to cover tuition and living expenses, but also making (relatively small) monthly payments towards these loans to avoid interest once I graduate. As a result, I will graduate with just about $25,000 in student loans, all of which have an interest rate at less than 5%. Other college-related expenses, like textbooks, activity fees and late night study sessions laden with coffee and energy drinks, have been covered by what I earn through my part time job.

Outlook & Return on Investment

All of the expenses, work and payoff described above combines to make a relatively optimistic outlook after graduating. Taking an investment approach toward education has certainly helped my attitude; as one academic study notes, “The cost-benefit calculus facing prospective students can make the decision to invest in and attend college dauntingly complex… some students borrow too little and, as a result, underinvest in their education” (Oreopoulos & Pentronijevic, 2013, 41). Thankfully, I was blissfully unaware of the dangers of student loans and took out just what I needed to be able to attend college. Hindsight is 20/20, and I am now able to make a careful consideration of what my education has bought me in terms of my future, which makes it an investment. As Oreopoulos and Pentronijevic (2013) go on to say, “For any particular program at a particular school, anticipated future labor market earnings, the likelihood of completion, the costs, and the value of any student debt must all be factored into the assessment” (41). With this calculus, I estimate that it will take me just under four years for my investment in education to pay off.
I estimate the total cost of attending college to be right around $130,000. This includes my student loans, opportunity cost, and various associated expenses. Without a college degree, I can safely assume that I would be earning minimum wage as a burger flipper or manual laborer.
Even working 60 hours per week with two jobs (or 3,000 hours per year), this would earn me just $22,000 per year – or $88,000 over the course of four years. This is is the salary I “gave up” by attending college, otherwise known as opportunity cost. I can safely add on roughly $3,000 per year in various expenses, such as books, activity fees, and other silly college ‘expenses’ (I don’t party, but still). That puts my total “investment” at $125,000 – $88,000 in opportunity cost, $25,000 in student loans, and $12,000 in costs I paid along the way. Finally, I plan to pay off my loans over the course of four years, which means that at 5% interest I will be paying $5,000 in interest. This bumps the total investment to $130,000.
According to the Bureau of Labor Statistics (of the U.S. Department of Labor), the average Human Resource specialist earns $58,000 per year (BLS, 2016, n.p.). Upon graduation, that puts me $36,000 over what I would have been earning if I did not attend college. This means that my direct expenses ($12,000 in out of pocket expenses and $25,000 in student loans) will be ‘paid off the very first year. However, taking opportunity to cost into account it will take me just under four years for the entirety (i.e. time and money) of what I invested to be paid off. However, what is really heartening is that Human Resources managers have a much higher compensation- with a median pay of $104,000 per year (BLS, 2016b, n.p.). Furthermore, one can become a Human Resources manager with just five years of experience. This means that just a year after my investment in higher education pays off, my salary is likely to be bumped to nearly five times the pay I would be earning if I had not attended college at all. In this way, while it may take me almost four years to ‘pay off’ my initial investment, the long term ‘growth’ of my investment will be exponential and well worth my while.


  • BLS. (2016). Human Resources Specialists. Bureau of Labor Statistics. Retrieved from: BLS. (2016b). Human Resources Managers.
  • Bureau of Labor Statistics. Retrieved from:
  • Holt, E. et al. (2015). The greatest learning return on your pedagogical investment: Alignment, assessment or in-class instruction? Plos One 10 (9): 1-19. Retrieved from:
  • Oreopoulos, P. & Pentronijevic, U. (2013). Making college worth it: A review of the returns to higher education. The Future of Children 23 (1): 41-65.
  • Sammer, J. (2016). Easing the Student Loan Debt Burden? Points to Consider. Society for Human Resource Management. Retrieved from:
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