26 July 2016 –
The issue of student loan debt is one of the topics often discussed on personal finance blogs. I’ve read many articles by bloggers who have gained their degrees either with no debt or have paid off the student loan within a few years of finishing university, which is commendable.
However, the reality is, that for many students and ex-students, their loan is going to be a financial burden around their neck for many years to come.
For clarity, I will use the term ‘university’ but this includes colleges, technical institutes and any other tertiary educational institute where students pay for their tuition.
I do understand that for many, there is an in-built rational that a university qualification is the way to a better job, improved career prospects, and increased financial gain over the course of one’s working life. And I don’t, for a minute, disagree that there are significant lifelong benefits to be gained from such a tertiary education.
However, this is only one of the ways to ‘get ahead’ in life. There are others which will provide a) getting paid to learn, and b) freedom from significant debt early in your working life.
Admittedly, for those who choose professional careers or highly skilled industries such as science, medicine or engineering, the lack of a suitable qualification probably won’t allow you a foot in the door. And I for one am quite pleased about that. The idea of people designing bridges or performing surgery with just a high school level of education would have some fairly serious implications.
And there is no doubt that some tertiary qualifications will lead to extremely high paying jobs in the future which should allow you to pay off your student debt quickly.
But the reality is that for many professions where a degree, or higher, is required, such as nurses, teachers, and many sciences, you are not going to be raking in the dosh from early on. So the debt to income ratio is going to be much higher than with other professions.
In saying that, student debt should not necessarily be seen as evil, but perhaps, according to Matt at Distilled Dollar,
“as something essential that carried us to the next phase of our lives. …the mountain of debt we accumulated during undergrad, was the spark that helped us shape up.”
Read more at his great blog here.
But what about those of us who aren’t inclined to follow the more academic path?
I along, along with many of my friends, had no interest in further studies after finishing high school. We just wanted to get out there, start work, and begin earning some money.
I began an apprenticeship with the Post Office as a Lineman. You know, the guys who climb up telephone poles, dig holes in your front lawn, hook up your house to a phone etc.
Although some of my friends took on fairly low-level labouring type jobs (a couple of them have gone on to become very successful businessmen), many of us began apprenticeships as motor mechanics, builders, glaziers, and of course me as a ‘Liney’.
So if you, or someone close to you, is nearing the end of their high school life, what should they consider doing at least for the next few years? Go to university or begin an apprenticeship?
For some, like me, it was a pretty easy decision. I’d had enough of the education system (or was it the other way around?). I didn’t feel academically inclined towards tertiary education, and was keen to get a job where I could learn some practical skills. The idea of a weekly pay packet was pretty attractive too.
Once graduating as a fully trained tradesperson, you have skills that are valuable to an employer, as well as other practical and life skills, such as punctuality and team work. Many tradies go on to build their own successful businesses.
Compare this to the high levels of graduate student unemployment especially around the start of the business year. There are often many similarly qualified graduates vying for the same jobs. And, unless they have managed to gain some industry skills during their study, they’ll often have plenty of knowledge but no skills to offer employers.
And along with new found unemployment, most have a pretty hefty student debt that they need to start repaying.
But don’t assume working as an apprentice is all beer and skittles.
You’ll Have To Work Hard – Like all worthwhile things in life, you’re going to have to work hard to get your theory and practical work completed. This means that you might miss out on going out with your friends all the time because you’ll have to work a full working day every and then do night school or weekend classes as well.
Low Pay – As I said before when you do an apprenticeship you get paid to learn, which is great! However, don’t think that you’re going to be on a brilliant wage. Apprenticeship wages tend to be pretty low so it’s important not to have really high expectations in that respect. Remember your employer is helping you develop your skills, so you won’t be paid a full wage until you’re fully qualified.
You’ll Start From The Bottom – When you start your apprenticeship you need to learn the basics. You might find that some of your tasks are a tad boring to start with. But that’s just a fact of life. Everyone has to do jobs that can be a bit mind-numbing at times but once you’ve learnt those skills you’ll move on to better things.
Competition Is Tough – Some apprenticeships are in high demand. If you really want to get into an apprenticeship you need to make sure you have put some work into your application.
I certainly have no regrets starting my working life as an apprentice. Not only was it a lot of fun but I worked with some great people too, as well as learning many skills that I still use today, such as using a chainsaw safely, laying concreting and driving a truck.
In time, I did move onwards and upwards from that initial hands-on work and eventually moved into the corporate world where many of my peers had degrees. However, through my own hard work and industry knowledge, I worked and competed with them on an level playing field.
This is only my opinion on one of the alternatives to heading for university after leaving high school. Don’t think for a moment that I am not knocking anyone who has gone down the tertiary education path.
However, There are many paths to getting an education and some people are just not ‘meant’ for higher education, myself included. And the world’s always going to need skilled tradesmen to build your houses, fix your cars, and build the things that the engineers design.
Who here also took the mud, blood, sweat, and beers path in their working lives? How many of you with your fancy, schmancy [;-)] degrees sometimes wished for a more get-your-hands-dirty type job? Go on, share your tales here in the comments?