A Loan for a New Truck is a Debt. College is an Investment!

Dr. Tom Jackson, Jr., BHSU President

Rapid City Journal Guest Editorial by Dr. Tom Jackson, Jr., President, Black Hills State University

Public higher education is an investment. The best investment you can make in your future.

This time of year parents and students are making financial arrangements for college. While there has been a growing concern about the rising cost of college, allow me to reframe the conversation and add a different point of view.

College is still a bargain that provides an exceptional rate of return.   It is a wise investment even as state support is declining and the cost to families has increased.

Consider the $50,000 cost of a new full-size pickup. The amount of this debt is greater than the average student loan investment.  Yet whereas the truck depreciates, a college degree provides higher earnings of $800,000 to $1 million over a lifetime. That is a better return than the stock market. Furthermore, people with college degrees tend to enjoy a higher quality of life. They also pay more taxes, which is good for the state.

As with all financial decisions, students should consider educational choices carefully. Many students receive financial aid. Those with means, or those in the middle, tend to receive less (or no) aid because the federal financial aid system is based on "need." Families with lower income are often eligible for more aid. The system is designed for and expects familial support. Loans are designed to fill the gap between financial aid and family support. It may not be as wise to attend an expensive college that requires substantial loans when the student might be considering a lower paying profession.              

State universities provide a quality educational experience at a reasonable cost, with an impressive return on investment. Universities, along with all organizations, face increased costs to repair buildings, pay personnel, and provide services that families want on campus. However, colleges still must continue to become more efficient even as they face increased costs due to legislation, regulations, or accreditation.

Now, to add a personal story. I was the first in my family to earn a degree. I had financial aid and student loans. I worked in college to cover costs my family was unable to support. I dutifully paid off my student loans over a 10-year period. That $27,000 total undergraduate and graduate loan amount (investment) created the opportunity for me to advance in my career and become a college president.

My experience is not unique or even unusual. There are many who borrowed conservatively and are doing well in their chosen professions. My family did not have the means to fund my education.  We did not have a $50,000 pickup truck. We had a well-used 1968 station wagon.

College is a very smart investment. It is not a debt. Remember that as you make plans for your future.

Dr. Tom Jackson, Jr. is the President of Black Hills State University located in Spearfish, South Dakota. As one of the six state universities, BHSU has 4,200 students and offers over 70 degrees in education, business (AACSB), sciences, humanities, arts & music, and sustainability.