Friday, April 27, 2012

Lost Wages Due to Delayed Graduation

The above chart illustrates that time is money.  The idea is that you are losing out on wages for every additional year needed to complete your degree.  The longer you take to complete your degree the more you are holding back your career and many of your later financial goals.  If you are borrowing money (as most are) to pay for college, then your student debt will be higher the longer it takes.

When you complete your degree, you begin a slow upward march up the pay scale.   As your experiences increases, you become more valuable in the job market.  

I know retirement seems a long way off, but many companies have retirement benefits. By completing your degree one year earlier, you are seriously compounding your retirement benefits and reducing your retirement age. 

Regardless of your feelings about marriage and children at this point in life, there is a good chance this will become more important later.   Let’s do some math: Assuming it takes seven years to get the degree, three years to get yourself set financially and get married, and another two years to have children; you would be 30.  Now it’s possible to have children at 30, it’s just harder.  According to Sara Rosenthal in her book, The Fertility Sourcebook  at age 25 there is a 78% likelihood of getting pregnant but by age 30 it drops to 63%, and by age 35 it is down to 52%.  

Most college bound people have been taught to hold off on children until the career is set and that is sound advice.  I would just add that you need to make sure that you don't extend the education aspect of your career/education/family timeline.
Life needs to be done in order, but it also needs to be done with purpose.  There is a window of opportunity where getting a college degree is the easiest.  The longer you wait to finish your degree, the more likely you will be handling increased responsibilities while going to school.  It just gets harder over time. Get it done quickly, so you can move on to other areas of your life (Proverbs 24:27).  This is the golden rule of college: The longer it takes the more likely you will drop out.