By Elizabeth Davies
When I was little Disney taught me to follow my dreams, it didn’t tell me to pursue my salary expectations.
Now I’m being told that my education was, financially speaking, a poor investment. I chose to go into debt in order to get a qualification in a field with notoriously low earning potential.
Did I make a huge financial mistake? Or perhaps I simply realised that you can’t put a price on a career that you love.
Before studying post graduate journalism I did a Bachelor of Arts in English and History. Needless to say I wasn’t inundated with job offers upon graduation. So I did what any terrified and lost 21 year old would do. I re-enrolled.
It’s taken me years, and thousands of dollars to finally find what it is I want to do with my life. But to call it a bad investment fails to do any justice to the personal growth tertiary education provides, and most definitely undervalues the final outcome.
The reality is, we can’t all study medicine and law. Just because these degrees have higher earning potential, they don’t immediately come with a job guarantee as a number of recent law grads will unhappily confirm.Then what are we left with, a fleet of extremely over-qualified baristas?
From the age of 15 we are forced to make decisions that lead to subject specialisations. These choices then directly affect the areas of study we can go into. So many teenagers are pushed through the system straight into degrees that perhaps don’t quite fit, all because they aren’t really aware of their other options.
I’ve seen dozens of friends rack up thousands in debt, only to get halfway through a degree before realising it was the wrong choice right from the beginning. Swapping out passion for financial motivation in degree choice will only guarantee an increase to the already staggeringly high drop-out rate.
In my personal experience a great deal of student debt could be avoided by slowing down the transition between high school and tertiary education. I wish I had taken a year off to work, and genuinely weigh my options.
The reality is, and thankfully so, we never turn out to be the exact people our fifteen year-old selves wanted, or expected us to be. Yet the hasty decisions we are forced to make as teenagers dictate the foundations of our career.
It’s like picking an outfit when you turn 15, and then being forced to wear it every day for the next five years. Cringe worthy.
My student debt is not to be dismissed lightly, but I feel it should be recognised for what it really is. The years of study and struggle and the thousands in debt are an investment in my future sanity.
Life’s too short to spend a minimum of 40 hours a week doing something you hate. That kind of stress is enough to drive anyone into therapy, and as we all know, I could never afford that on my meagre journalist salary.
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*Elizabeth Davies is a 23 year old post graduate journalism student at Auckland University of Technology. She lives with her partner in Epsom and spends her free time refurbishing vintage furniture and attempting to bake while fighting a daily battle against her bank balance. She writes a weekly article for interest.co.nz on money matters and financial struggles from a young person's perspective.
16 Comments
It's hard to convey to a high school student how badly a student loan weighs you down later in life - even if you do choose a career that you enjoy and pays well. If only I could convince 18 year old me to do 5 years of university instead of 6.
Most of my friends didn't have student loans, and they're now buying their first houses.
Life’s too short to spend a minimum of 40 hours a week doing something you hate.
That ones a bit of a myth - the reality is life isn't really all that short .. a working life is actually usually quite long and most folks find if they are sufficiently motivated they end up re-making themselves and their career path many times over.
There's this old saying - you either have the type of personality that 'lives to work' or you 'work to live'.
Everyone needs to do what seems right for them, but if I were advising a student, I think I would suggest the time to take the 'gap year' and get out and do any old job that comes along - is after one finishes the undergraduate degree. That's the time to get a 'work to live' job because from a future career/future employer's point of view - a strong history of work ethic, even if in the most boring/simple of jobs, is more important than the qualification. I'd suggest, get a good 2-3 years of work history in behind and then think about post-grad study.
That also gives one time to pay back any undergrad loan.
I guess my main point to young people would be - life is not short - there is no need to pressure yourself by thinking that it is.
When I was young tertiary education was just that. An education. And of course it was free. Law, medicine and dentistry were the only "trades" learnt at university. Everybody else who wanted to learn other trades went to the Tech. Apart from Nursing, Dental Nursing and Teaching but they had their own institutions. They were all free and in some we received a salary while training. There were night classes for hobbies. The fees for those were very small indeed and certainly did not require anyone to go into debt. I think in those days Government recognised the Country needed a highly trained and educated work force. However then came another economic point of view and turned everything into a business. People became units to exploit and make money from. And that is why you have debt. I am sorry Elizabeth that you have been caught in this cycle because it is a cycle. All I can recommend is get rid of debt as fast as you can. Live as frugally as you can. There is no real peace of mind when you have debt. It is not a job that gives you happiness, it is being in control of your life. Everybody gets bored with their job at some stage and it matters not how many jobs you try. I promise, you will get bored with each and every one of them. Just get rid of that debt little by little. No amount is too small to start getting rid of debt
Bit late and your horse has bolted.
My advice would be to avoid any line of study that does not have the potential to support your loan repayments. The cynic in me says the academics in the universities are there to keep their functions viable, and students are a necessary evil.
Go for a ''useful' degree so you give yourself some chance of starting out at a reasonable earning level. Avoid degrees that attract too many students for the subsequent labour pool to accommodate.
Corporate PR pays fairly well, and it is what I understand people with journalism backgrounds do if they want to make money.
In large population terms people with tertiary educations have a better lifetime earning potential than people who do not (I will caveat this by I have not seen any analysis of New Zealand student loans and if the introduction of them is matching the projections in practise).
New Zealand did see a big per head increase in the number of people getting a tertiary education in the last decades of the twentieth century. I suspect that this may have both democratised and devalued the education (there is also some accompanying pressures such as the destruction of the apprenticeship systems such as journalisms cadet one, externalising the cost of training employees onto the employee).
There is obviously more to Elizabeth's story than she is disclosing. From one perspective it manifests the very function of todays society in the digital age and social media and the disappearance of age old traditions and facilities obtained from what I call the collective wisdom of "the village elders" and the elderhood and a willingness of the adolescent to avail themselves of that pool of experience and knowledge.
What is sad about all this is it has been canvassed here before. But this web-site has no memory. Searching the in-built archive is near impossible. To find an archived post you need to know precisely what you are looking for and then use google to find it. The search mechanism is hopeless.
So think about that Elizabeth. The digital society of today has no memory.
Here is a post from 2013 about a young 25 year old who I do know who did a 4 year BA honours degree in Archeaology (of all things), worked in retail to pay her way through university, no debt, then started a graduate degree in archeaology, then gave up, and is now working as a sales assistant in retail.
http://www.interest.co.nz/opinion/62653/fridays-top-10-nz-mint-basel-betrayal-banking-war-front-simple-bank-dodgy-signature-co#comment-721147
On the collective wisdom front, there is enough collective journalistic wisdom within Interest.co.nz that could have given you the drum before you started. Did you ever consult the elderhood before you embarked upon both your under-graduate and graduate studies?
Here is a post that describes conditions within the news-media industry 30 years ago. The writing was on the wall then. Had you known me, and had you asked I could have given you this wisdom. The wisdom is always there. Just needs asking the right questions to find the right people. But, you do have to ask.
http://www.interest.co.nz/opinion/64527/murray-grimwood-serves-his-best-shots-media-way-they-report-growth-does-he-convince-yo#comment-737323
Given students pay only 1/3 or so of the total cost of their university (lower if paid through an interest free loan) - the answer to the question is most likely yes, it is a bad investment. As with most goods, subsidies tend to result in over-consumption. Unless the positive externalities are sufficiently high then any people who attend university, but would not if that had to pay the full cost, are likely to be a bad investment. Given tertiary education primarily benefits the receiptient (noting of course it travels with them if they go overseas, and they receive the higher earning potential, if any) this likely means much NZ university education is a bad investment under the current set up.
An interesting interview about this subject can be heard on
Kim Hill interviewing Professer Guy Standing from the University of London about the new class of people in our society.
My son finished his IT degree, tuition free, but had 35k student loan taken for living expenses in another city, got a job, stayed with us, and in the first year repaid the student loan....He also paid some small weekly boarding charges to us. All happened in the last 2 years.
Elizabeth - I'm a few years past you in that I went to university and got my degree and have worked full time for around seven years since then doing a job a don't particularly enjoy. So now I'm biting the bullet and hoping to get graduate entry into medicine next month, which will be a massive lifestyle change, but the right one.
I pretty much agree with you though - how many people know what they are going to do with their lives at age 17? When I left school there was a lot of pressure around to go to uni, even for those who weren't cut out for it. This pressure seems to have lessened of late, with numerous options available to school leavers. The fact is that the education system doesn't cater very well for young people who may mature academically at later date. For instance, I have a 30 year old friend who is now at university for the first time and doing well. How many other people are there who are wasting their skills just because they weren't considered 'university ready' at 17?
My advice for school leavers considering further study would be two fold - choose to study something that you would happy to make a career out of, and secondly, that will pay you an income that you would be comfortable with. It may be hard to get an adequate answer for both of those factors, in which case you need to choose what is the most important and which fields you are likely to gain employment. It needs to be remembered as well that in some fields you will likely need to go right through to Phd stage, for which the Government has recently made some real student loan/allowance headaches. I'm a firm believer that no education is wasted education, but there are definitely some choices that are better than others.
As for my own road, I don't really want to contemplate what to do if I don't make in into medicine. I'm fully aware that we are incredibly fortunate in this country to be able to make career changes like this and to have a second crack at university study, although this is limited now by loan limits, which is probably reasonable. I've had a decent crack at my current profession so it can't really be said that i'm chopping and changing.
The answer is rather simple. First of all we are investing our money is something that pretty often has a quite substandard quality. Think of this: the price rose significantly while there were no changes to education system. Second of all the entire job market has been pretty poor. You know it is much better to choose a profession which does not require you to have a diploma hanging on your wall. Like freelance writing: take good course in professional original essay writing and you can find lots of jobs offered online. So yes, so far this is a bad investment.
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