Across the country this summer, members of the class of 2016 agonized over course listings, compared first semester schedules, and stocked-up on dorm room essentials. But for most, matriculation this fall came with a less exciting challenge: navigating an education without acquiring exorbitant debt.
Student loan debt exceeded $900 billion in the first quarter of 2012, up $30 billion from the previous quarter, the Federal Reserve Bank of New York reported on May 31. This number has increased by $663 billion since just 2003. Student debt is so widespread that two-thirds of the class of 2010 graduated with loans averaging $25,250 each, according to the Project on Student Debt.
At the same time, some experts say the country is facing a shortage of workers in STEM fields—Science, Technology, Engineering, and Math. This means that it may be easier to find good-paying jobs in these fields. Is the STEM shortage a way out of student loan woes? Perhaps if more students choose to study a STEM subject, the country would see less student debt.
“For young people who are thinking about what career they want to go into, they need to understand that the demand for STEM is likely to grow,” says Linda Rosen, CEO of Change the Equation, a nonprofit STEM initiative. According to the organization’s recent study of job boards, STEM openings outnumbered unemployed people by almost 2:1. For non-STEM jobs? Just one job on offer for nearly every four people out of work.
STEM occupations are projected to grow 17 percent from 2008 to 2018, compared to 9.8 percent growth in non-STEM occupations, according to the U.S. Department of Commerce. The only field with higher growth rates is healthcare, which some organizations, such as Change the Equation, include under the STEM umbrella.
Along with greater job opportunities, salaries tend to be higher in STEM jobs, shortening loan repayment time.
Starting salaries in engineering fields are among the highest, according to a 2010 CNBC study. They range from $54,038 to $86,222. With loan repayments capped at the 10 percent of discretionary income—the level the President has proposed—the highest paid engineering majors could repay a debt of $25,250 in less than three years, while a psychology major earning an average starting salary would need over seven years.
There’s one important caveat to the STEM solution to student debt. An increasing number of universities impose differential tuition fees for certain undergraduate majors, targeting STEM and healthcare studies. A student mapping out a budget can easily overlook the extra cost, but should watch out for universities charging extra for certain courses or demanding fees to offset high lab costs, says Mark Kantrowitz, publisher of FinAid.org. He explains school administrators’ logic this way: “These students are going to be better able to repay loans, and they can perhaps afford to pay more,” he says. “It’s not as though [schools] are doing it to students in the humanities.”
Higher fees might also be necessary to support valuable but expensive STEM programs. “I would rather see them charge supplemental fees than cut these programs ,” Kantrowitz concludes.