How to Calculate Your Worth as a College Student
Make sure you look at your education with a business lens.
When I was preparing to launch Student Patterns, I ran into a big marketing hurdle that set me back a few weeks. I had planned to buy advertising on sites like Facebook and Google. I knew that was the fastest way to let students know there was a new tool that could help them identify their best-fit majors and careers.
The problem? The college loan companies had driven up the cost of pay-per-click advertising targeting college students to crazy heights. As a result, I had trouble competing with them for ad space.
It makes sense. What other loan category offers such a secure bet for private lenders? While people facing financial hardship can file bankruptcy to eliminate auto loan debt, credit card debt, etc., a majority of student borrowers can’t eliminate college debt, even in bankruptcy. That’s a nice investment “guarantee” for college lenders.
Here’s the basic math. The average college student graduates with $37,172 in student loan debt. If this loan is from a non-government lender, the average interest rate on it is 9-12%. That means a lending company can expect to make about $3000 per year in interest on the average student. At that rate, they can easily afford to pay $1.50-per-click on ads to pitch their loan products to those students.
What does all this mean for you as a student or parent? You must remember that college education is a business. Yes, some great people work in higher education who sincerely care about students, but never forget that the whole system is also run to make money. Even the federal government is making money on the loans they offer. In 2016, they made about $1.6 billion.
College students were worth $1.6 billion to the US government in loan interest last year.
That’s why it’s vital for students to know where they fit best in available career fields. Otherwise, it’s easy to become a financial victim of the system. The majority of college students switch majors at least once, and the average student changes majors 3-4 times. It’s obvious most people aren’t entering college with a clear picture of where they fit and what they have to offer. That indecision costs the average student (or parent) an extra $10,000 when those changes add another semester to their college years.
Confusion about your best major can easily cost an extra $10,000 or more when it results in the need for extra semesters.
So what are you worth as a student? Well, to the private lending companies, you’re worth about $3,000 per year. Not bad if they get enough of you. To the federal government, you were worth about $1.6 billion last year as a group.
But what are you worth to your first employer? What are you worth as an entrepreneur if you start your own business after finishing college or start it now without college? What are you worth right now if you know how to take your current skills to the marketplace immediately as an employee or apprentice?
Discovering the pattern you use to process life is the first step to determining your financial value to the market. Understanding this pattern, or “personality type,” can give you a powerful advantage in choosing a career that highlights and builds on your natural abilities. Do you have the natural, raw ingredients for a brain surgeon, an entrepreneur, an accountant, an executive assistant? Your Student Pattern can help tell you.
Are people only worth as much as the money they make? Of course not. It’s impossible to calculate what any human being is worth in money alone. Life is too rich and complex for such a calculation. But it is helpful to estimate what your natural skills might bring you in the marketplace. Knowing this will help you make good business decisions regarding your next educational step.
Colleges, loan companies, and future employers are looking at you through a business lens. There’s a dollar sign on you. Make sure you look at them with the same lens. And remember, just like all products offered in the marketplace, just because they’re selling it, doesn’t necessarily mean you need it.
Start by discovering your Student Pattern. Once you do, everything else will begin to make more sense, including what your natural skills might bring in the marketplace, both now and in the future.
Are you a student looking for your best major or career? Want to minimize the classes you need and maximize your future earnings, sense of fulfillment, and potential?
Are you a parent helping your child choose the best major or career field? Want to maximize their future success and minimize the expense of their education?
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