By Nathaniel Sillin
Could a mid- to late-career return to college make sense for you?
It’s essential to evaluate whether this is a financially risky move.
In recent years, older Americans have been heading back to school part-time and during evenings in greater numbers than students of typical college age.
According to the National Center for Education Statistics, enrollees 25 years of age and older account for 40 percent of all undergraduate and graduate students – by 2020, that number will rise to 43 percent.
Statistics proliferate on how much more valuable undergraduate college degrees are than high school diplomas alone – a recent Pew Research Analysis study reported that college graduates aged 25-32 and working full-time earn about $17,500 more a year than employed adults in that age group with only a high school diploma. It’s an indication why college is a fairly clear sell for younger people.
However, for people over 40, there are no similarly clear-cut rewards. That’s why it’s particularly important to do extensive due diligence before returning to college or any other training program. That’s doubly true if you can’t afford tuition out-of-pocket.
Here are considerations to make before making a mid- or late-career return to the classroom:
A degree doesn’t mean a job. That may seem obvious given the recent hiring fortunes of younger, first-time college grads. However, even though some job indicators are looking up for older workers, it doesn’t mean past experience and a high-quality degree or certificate program will immediately lead to employment or better pay or for how long. Start with a thorough examination of working conditions and hiring forecasts (http://www.bls.gov/oes/) in your chosen field. If it’s a complete career change, add face-to-face networking and observation of the job in action, if possible. Most of all, it’s important to know whether employers in that specific field really are interested in hiring older workers and have a record of doing so.
Fully evaluate your finances. As risky as student debt levels are now – the average student is borrowing around $30,000 – spending money on school when you’re older is a much riskier proposition than when you’re young. Consider that late-life tuition is money that won’t go to retirement, a child’s tuition, an older relative’s needs, consumer debt or financial emergencies. In other words, it’s an investment that really has to pay off. Also keep in mind that student debt cannot be discharged in bankruptcy. This is why it is important to seek qualified financial and tax advice before committing to spending savings or taking out student loans to return to school.
Determine how long you really plan to work. A 2013 Gallup poll indicated that three in four U.S. workers plan to work past the conventional retirement age of 65, but no one really knows how long they’ll be able to work given health and other factors. Will you be able to recoup the cost of training based on the number of years you hope to work?
Find the most affordable training possible. If a field is friendly to new workers your age, what will you have to invest in training to get the right job? Will it require a masters-level degree or a training certificate that makes you a specialist in a specific skill? Will some employers accept free or low-cost online courses being offered by known colleges and universities? The American Association of Community Colleges’ Plus 50 Initiative is a useful resource for lower-cost training options at community colleges throughout the country. Also check with your chosen industry’s leading trade associations to see what certificate training is most popular within the field and what it costs.
Bottom line: Education is beneficial at any age, but mid-to-late career workers should evaluate their finances and thoroughly investigate degree programs before going back to school.
Nathaniel Sillin directs Visa’s financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney.