When debt produces return on investment

While debt often has negative connotations, not all debt is bad. Debt in pursuit of a university degree is one of the best investments a student can make in his or her future. The return on investment in education is real.

The Organization for Economic Cooperation and Development (OECD) did a study a couple of years ago. The OECD found that the typical graduate from a four-year college earns 84 percent more than a high school graduate. The same study also indicated that a college degree is worth $365,000 for the average American man after subtracting all the direct and indirect costs over a lifetime. For women—who still tend to earn less than men—a college diploma is worth $185,000.

College graduates aren’t having problems getting their careers started either. The US Department of Education’s National Center for Education Statistics reports that as of 2012, college graduates from the Class of 2008 had spent just six percent of the previous four years unemployed. Eight out of ten Class of 2008 graduates had one full-time job during the previous four years, another eight percent of the graduates had multiple jobs during that time period.

No one wants to start his or her career in in the red. And the amount of debt a student incurs should be considered in light of his or her intended career choices. The good news, however, is that in addition to the economic returns your college education will produce, the federal government gives graduates more advantageous repayment options than ever before.

Under Income Based Repayment (IBR), students who have US Department of Education (DOE) loans only have to pay a maximum of 10 percent of their income per month. Any balance left after 20 years is forgiven. IBRs are especially attractive to graduates working in government and non-profit jobs because the DOE forgives their loan balances after 10 years. IBRs are growing in popularity among students. The DOE reports that between April 1, 2013, and September 30, 2014, participation in IBRs doubled.

Graduating from Pace also is an advantage for people carrying student loans. Approximately six out of ten Pace students have at least one internship. Many have multiple internships. This real-world experience gives our graduates an advantage in the job market. In fact, PayScale ranks Pace graduates in the top 15 percent nationally for average earnings in first and mid-career jobs. Pace students also have a lower loan default rate than students from many similar schools.

Students or parents considering student loans should explore their options with Pace’s professionals in our Financial Aid Call Center at 1 (877) 672-1830; while graduating students should talk with a counselor in our Career Services Department. The department is one of the largest of its kind among colleges in New York City. Students can make an appointment with a counselor by contacting the appropriate campus office at http://www.pace.edu/career-services/location-hours-staff-directory.

Finish in Four

The number “four” pops up a lot in our everyday lives.

There are four seasons—spring, summer, autumn, and winter. There are four directions—east, west, north, and south. There are four books in Islam, and the Four Noble Truths express the basic orientation of Buddhism. In Christianity the four-point star, or the Star of Bethlehem, represents both Jesus’ birth and the purpose for which he was born, and children ask the four questions at the Passover Seder. In professional baseball, basketball, and hockey, teams must win four games out of seven to be crowned champions.

In numerology, the number “four” is defined as disciplined, strong, hard-working, and conscientious. These four adjectives describe Pace students.

Now the number “four” is more prominent on our Pace campuses. We kicked off our Finish in Four campaign at the start of this semester. We handed out flyers during Orientation and hung posters on both campuses. There’s also a new video on the way. The campaign supports Provost Sukhatme’s goal to have students graduate from Pace in four years or less.

There are all sorts of advantages for students to finish in four. For one thing, students who graduate in four years pay less than students who delay graduation. In addition, lower costs often translate to lower student debt. Students who finish in four can also begin their careers faster—which mean becoming economically independent and self-sufficient. Most important, however, students who commit to finishing in four years are more likely to complete their degrees than students who plan on taking longer to graduate.

Graduating in four years may not be for everyone. Some students who work and attend school at the same time, for example, may not be able to commit to Finish in Four schedules. But students who do commit to graduating in four years or less do not have to sacrifice their undergraduate experiences to do it. These students are still afforded every opportunity Pace has to offer—including access to internships, study abroad programs, honor societies, student activities, and leadership opportunities.

Finishing in four isn’t difficult—it just takes the commitment, dedication, and hard work Pace students are known for, combined with the thoughtful planning they do with their advisers. Pace faculty and staff are very supportive of this initiative and there is no doubt in my mind that once our students commit to Finish in Four, they’ll do it!