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Balancing Loan Repayment with Pursuing Your Passion

by Justin Marquis Ph.D.

In my recent post, “Making Creativity the Focus of Your Higher Education,” I state that one surefire way to make yourself a happy lifelong learner and the kind of employee that businesses want is to follow your passion during your college career. The only problem is that the post never took into consideration loan repayment rates for various professions. What if you want to be a marriage counselor? If that’s your passion, you can, according to a recent guide from BankRate.com, expect to be repaying your college loans for nearly 35 years! In contrast, if you are interested in advertising, for example, the average repayment period drops to a very manageable six years. So how can you, as a college student, balance your passion for what you would love to do with a realistic ability to repay your loans? This post will help guide you through the process.

Bankrate Data and the Reality of Loan Repayment
Bankrate put together a very interesting graphic by combining recent education cost data from the National Center for Education Statistics with data from the National Bureau of Labor Statistics. According to Bankrate, the “costs for undergraduate degrees are based off the tuition, fees, and room and board of a four-year, in-state, public school with no scholarships.” While the costs for graduate degrees are “based off of NCES data regarding tuition and fees for the specific area of study.” The site then computed repayment figures based on a loan interest rate of six percent. Keep in mind that this is only a guide, and probably a “Worst Case Scenario” one at that, so do not take it as the only possible source for deciding on a career. It only presents some rough averages that should be applied with care.

The chart aligns professions with the minimum amount of education required, the cost of the degree, the average annual salary, the annual repayment amount (figured at 10% of salary), and the years required to pay off one’s education for each prospective field of employment. While they don’t cover every possible career, they do give a broad enough overview that most current college students can use the data to help gain perspective on their own future loan repayment.

 

What is the ROI of your college degree?

Occupation Minimum required years in college, graduate school and professional programs Cost of degree (tuition, fees, room, board) Median pay Annual repayment (if 10 percent of salary goes to repaying school loans) Years needed to repay education investment (assuming 6 percent student loan interest)
Advertising, marketing, promotions 4 $52,596 $107,950 $10,795 5.83
Economist 4 $52,596 $91,860 $9,186 7.08
Civil engineer 4 $52,596 $79,340 $7,934 8.50
Political scientist 6 $68,010 $102,000 $10,200 8.58
Pharmacist 7 $92,421 $116,670 $11,667 10.83
Microbiologist 4 $52,596 $66,260 $6,626 10.83
Physician: family or general practicioner 8 $136,861 $172,020 $17,202 10.92
Accountant 4 $52,596 $63,550 $6,355 11.50
Market research analyst 4 $52,596 $60,300 $6,030 12.42
Lawyer 7 $103,677 $113,530 $11,353 13.33
Dentist 8 $139,298 $149,310 $14,931 13.75
Political science teacher: post-secondary 6 $68,010 $72,170 $7,217 14.00
Public relations specialist 4 $52,596 $54,170 $5,417 14.67
English language/literature teacher: post-secondary 6 $68,010 $60,040 $6,004 19.08
Zoologist, wildlife biologist 6 $68,010 $57,710 $5,771 20.58
Librarian 6 $68,010 $55,370 $5,537 22.33
Teacher (full-time) 4 $52,596 $43,400 $4,340 21.75
Veterinarian 8 $114,268 $84,460 $8,446 27.92
News analyst, reporter, correspondent 4 $52,596 $37,090 $3,709 31.83
Marriage and family therapist 6 $68,010 $46,670 $4,667 34.67

 

Sources: Bureau of Labor Statistics, National Center for Education Statistics, FinAid.org.
Read more: http://www.bankrate.com/finance/college-finance/roi-college-degree.aspx#ixzz2X9VnuiU0

Some of the highlights of the data presented include the fact that someone in advertising or marketing could expect to have their degree paid off in less than six years. That’s a great return on an educational investment of four years and @$52,000 in expenses. On the opposite end of the spectrum are marriage and family therapists who seem to have a fairly poor ROI at six years of education, nearly $70,000 in cost and almost four decades to pay off their loans. If you choose to be a marriage therapist you should plan to be saddled with your college loans until you retire.

Some other notable career choices with good ROI include economists, civil engineers, and political scientists, all of whom can expect to pay off their education in less than ten years. Notable poor ROI careers include teachers (no surprise there), veterinarians, and news reporters, who all can expect to be repaying their student loans well into their 40s. But what if you don’t want to be an ad exec, economist, civil engineer, or political scientist? Are you simply out of luck if your passion isn’t a great career choice?

Does Financial ROI Matter More Than Quality of Life?
Deciding on a career is a deeply personal matter that no one outside of the person making the choice can really make.  Having information available to help with the decision making process, however, is never a bad thing. Looking at the Bankrate table is one important piece of information to weigh when making this decision, but there are other variables to consider such as how good or bad a particular career is for the financial, mental and physical health of you and your family.

Financially it is well-documented that the more educated an individual is, the more they will earn in their lifetime, as the table below indicates.

(Carnevale, Rose, and Cheah, 2010)

In addition to the financial benefits of a higher education, there are significant direct and residual health benefits such as better medical care, and access to health-related information. Data from the recent CDC’s report, Health, United States, 2011, revealed that regardless of anything else, being more educated makes you and your offspring more likely to be healthy than people with less education.
Among the key findings from the report:

  • Men age 25 or older with a college diploma can expect to live 9.3 years longer than their same age counterparts with only a high school education. The difference for women age 25 or older is 8.6 years
  • Those with at least some college education are less likely to suffer from heart disease than those with no high school diploma (12.2% to 14.5%)
  • Those with at least some college education are less likely to suffer from a stroke than those with no high school diploma (2.5% to 4.2%)
  • Those with some college education are more likely to exercise (25%) compared to those with no high school diploma (7.7%) or those with a diploma but no college (12.7%)
  • Children whose parents have a BA or higher are less likely to be obese (boys 11.4%, girls 7.1%) than those of parents who do not (boys 24%, girls 22.3%)
    (All statistics from CDC.gov)

Given this data, one choice seems clear. Any career that requires a higher education is going to help make you a wealthier, healthier, and probably happier individual. So as long as pursuing your passion requires a degree, you are off to an excellent start with balancing your passion and ROI. No matter what college education requiring career you choose, there are significant long-term benefits beyond the rate of loan repayment. In short, any career choice that takes you out of the manual labor pool is likely to increase your overall life expectancy. You can use this calculator from the University of Pennsylvania to get an overall idea of all the factors contributing to how long you will live.

Ultimately, the decision is going to boil down to balancing repaying your loans quickly with being happier and more satisfied with the work you do. First thing is first, you need to identify your passion to determine if this is even an issue.

Identify Your Passion
Susan Biali MD, writing for Psychology Today, provides five steps for determining your passion in life that provide an excellent starting place for determining a career based on your interests.

  • Inventory your talents
  • Pay attention to people you envy
  • Remember what you loved to do as a child
  • Notice when you lose track of time or what you hate to stop doing
  • Make finding your passion an adventure

Make a list or chart of the traits you uncover from following Biali’s steps, paying particular attention to the concrete skills you identify or the concrete activities you can pinpoint as things you enjoy doing. The next step will be to determine if any of those obviously translate to a career. For example, if you have always enjoyed making and decorating cakes, it is easy to identify that your passion is of a culinary nature.

Some passions will be more challenging to correlate to a career.  One place to begin is with searching job placement sites like Beyond.com or Monster.com which will allow you to search for jobs by specific skills. Keep a journal of fields and positions that come up or that just generally look interesting to you as you browse postings. This process should help you generate a list of potential positions that meet your identified passions, whether that be in real estate, hospitality, human resources, or interior design. Check these against the Bankrate list to get a rough idea of where you stand on the repayment scale. Now comes the hard part, balancing your passion and ROI.

Weighing Passion vs Repayment
Despite all of the information presented above, the decision really comes down to speedier repayment of loans (which is a big deal) and following your passion (or passions – and that’s where the trick really is). Personally, I have gotten lucky in life by finding a career doing something that I am passionate about. I do have several passions in my life that could also have served as alternative careers – video production, horror fiction, or video game design all would have been viable alternatives. Consider that you too may have multiple areas that would provide career options that would be satisfying for a lifetime of work. Weigh all of your passions based on these factors:    

  • Intellectual Engagement vs Financial Considerations – Choosing to do something you are passionate about will help guarantee that you enjoy it and are interested in pursuing personal and professional relationships around your career. If you do something you are passionate about, you are likely to be interested in and appreciate the people who you interact with at your job and have intellectually stimulating conversations throughout your career.
  • Lifelong Interests vs Financial Considerations – Choosing something you are passionate about will guarantee that you remain interested in it, want to follow developments in the field, and want to contribute to the growth of the profession. This lifelong interest can also translate into greater success in your field.
  • Happiness vs Financial Considerations – Lastly, if you do something that you love you are more likely to be satisfied with the work, and lead a happier and potentially healthier life. There is no certainty that you won’t be happy in another career, but you are more likely to be happy pursuing your passions.

Finding a Middle Ground
For those struggling with the decision, there may be a third option. The Internet and an ever expanding global marketplace combined with inventions like 3D printing have made it possible that almost any passion can become a career given a bit of innovation and creative thinking. The possibilities now exist to forge your own paths to lifelong happiness and a career that combines two or more of your passions in new ways or that allows you to meld something you are passionate about with a career with a higher ROI. Here are some of the options.

  • Follow a hybrid career path – New fields arise regularly and often entail people finding new ways to make their passions profitable. This article from the Springboard HR blog provides some interesting insights into pursuing a hybrid career.
  • Personalize your degree – An entire post on this subject will be forthcoming on Education Unbound in the coming weeks. Some of the things that will help you combine your passion and better career options are: embracing a broad-base of learning; pursuing extra-curricular activities; developing hi-tech skills; finding an internship; and finding a mentor.
  • Make your own path – One final option is to throw caution to the wind and fully embrace your passion by charting your own course to success. Step outside of Bankrate’s data and set off on an adventure pursuing your passions that will last a lifetime. Not recommended for the faint of heart or those who don’t like uncertainty or risk. Though, in tough economic times, there is risk with every job.

Ultimately this choice is an individual one, so any advice needs to be weighed at a personal level. Personally, as someone who has pursued a career in education (my passion) at the expense of a greater monetary ROI, I would recommend following your passion almost without any reservation. If you are creative, you can find a way to make your passion pay. In the end money can’t buy happiness and that, for me, si the most important consideration of all.  I think Richard Cory would agree with my assessment.

And he was rich – yes, richer than a king –
And admirably schooled in every grace:
In fine, we thought that he was everything
To make us wish that we were in his place.

So on we worked, and waited for the light,
And went without the meat, and cursed the bread;
And Richard Cory, one calm summer night,
Went home and put a bullet through his head.

Edwin Arlington Robinson, 1897