Going to college or trade school often involves borrowing money, but a degree can unlock doors to higher-paying jobs. Jumping straight into the workforce post-high school means earning money right away and avoiding student loans, but possibly at the expense of future earning potential. Let's explore why it's crucial to weigh both your career prospects and the financial aspects of education when making decisions about your career path.

For each scenario, use theLifetime Earnings Spreadsheet to figure out the long-term impacts of student loans debt, career choice, and salary expectations on your lifetime earnings.

Assumptions

• All individuals work from graduation until the age of 65
• Associate Degrees are completed in 2 years, Bachelor's Degrees are completed in 4 years, and Master's Degrees are completed in 6 years
• All tuition is paid for by federal student loans
• For simplicity, tuition does not include living expenses or additional fees
• Inflation is not considered
• Loan interest is incorporated into lifetime earnings in a simplified way

Scenario 1: Entry-level Retail vs. Accountant

Background Information

Alex - High School Graduate	Jordan - Bachelor's Degree
Career Path: Entry-level job in retail Starting Salary: $40,000 Annual Raise: 3%	Career Path: Accounting College: Public University in Texas Tuition: Approx. $6,624 per year in-state paid for by Federal Student Loans at a 5% interest rate over 20 years. Starting Salary: $55,000 Annual Raise: 3%

Calculate

1. Enter the information for Alex into the spreadsheet.
   1. What are their lifetime earnings after 5 years?

1. What are their lifetime earnings after 20 years?

1. What are their lifetime earnings at retirement?

1. Enter the information for Jordan into the spreadsheet.
   1. What are their lifetime earnings (after tuition expenses) after 5 years?

1. What are their lifetime earnings after 20 years?

1. What are their lifetime earnings at retirement?

1. Compare
   1. Besides the cost of attending college, what are some other factors that could impact an individual's lifetime earnings?

1. Why are Jordan's lifetime earnings significantly lower after the first 5 years?

1. Do you think it was worth it for Jordan to delay working to attend college?

Scenario 2: Dental Hygienist vs. Social Worker

Background Information

Mia - Associate Degree	Liam - Bachelor's Degree
Career Path: Dental Hygienist College: Trade School Tuition: $3,412 per year paid for by Federal Student Loans at a 5% interest rate over 10 years. Starting Salary: $78,000 Annual Raise: 3%	Career Path: Social Work College: Private University Tuition: $37,000 per year paid for with Federal Student Loans at 5% interest over 20 years Starting Salary: $55,000 Annual Raise: 3%

Calculate

1. Enter the information for Mia into the spreadsheet.
   1. What are their lifetime earnings after 5 years?

1. What are their lifetime earnings after 20 years?

1. What are their lifetime earnings at retirement (45 years)?

1. Enter the information for Liam into the spreadsheet.
   1. What are their lifetime earnings after 5 years?

1. What are their lifetime earnings after 20 years?

1. What are their lifetime earnings at retirement?

1. Compare
   1. How much less did Liam make when compared to Mia?

1. Why might someone choose a career path like Liam's, despite the financial disadvantages compared to a path like Mia's?

Scenario 3: Military vs. Teacher with a Master's Degree

Background Information

Tyler - Military Enlistment	Emma - Master's Degree
Career Path: U.S. Army Infantry Starting Rank: E-3 (Private First class) Starting Salary: $27,119 Annual Raise: 2.6%	Career Path: Elementary School Teacher College: Public University (Out of State) Tuition: $16,400 per year for six years paid for with Federal Student Loans at 5% interest over 20 years Starting Salary: $55,000 Annual Raise: 3%

Calculate

1. Enter the information for Tyler into the spreadsheet.
   1. What are their lifetime earnings after 5 years?

1. What are their lifetime earnings after 20 years?

1. What are their lifetime earnings at retirement?

1. Enter the information for Emma into the spreadsheet.
   1. What are their lifetime earnings after 5 years?

1. What are their lifetime earnings after 20 years?

1. What are their lifetime earnings at retirement?

1. Compare
   1. How do Tyler's living expenses as a member of the military potentially differ from Emma's as a civilian teacher?

1. This scenario and the others listed above assume that the individuals stay at their current job for their entire life. What other factors might allow someone like Liam or Emma to earn more of their lifetime?