EDUCATION COSTS
I’m a high school economics teacher. Every year, I watch as sophomores, juniors and seniors stress out over the SATs, end-of-year exams and the financial burden of college. And no wonder: New Hampshire college graduates have the highest debt load in the country. In 2020, the average was over $39,000, and 70% of all graduates held debt.
This financial hill at the start of people’s working lives isn’t likely to change soon. Even federal student loan forgiveness measures are just a Band-Aid on what is really a longstanding challenge of outrageous college inflation. This is why I regularly show my students how to turn today’s after-school jobs into long-term financial success.
These after-school jobs aren’t the minimum-wage paychecks of my youth at Hinsdale Greyhound Park. My students regularly make $17 an hour in afterschool jobs, which is enough money to make serious progress toward debt-free college. Unfortunately, they are also spending huge portions of that money on sugary snacks, caffeinated beverages and apps — purchases that feel good now but will cost them later.
Let’s talk about how those “little” expenses add up.
A daily stop at Dunkin’ or Aroma Joe’s for the most basic cup of coffee costs at least $1.50. But it doesn’t stop there: Throw in the syrup and sugar for a premium drink, the processed breakfast sandwich, and a muffin or doughnut, and you’re pushing $10 a day — or over $3,000 a year.
That’s $12,000 over four years of college. And Bankrate.com’s investment calculator shows that an 18-year-old who invested $3,000 a year for 40 years with an 8% return would have a nest egg of $777,000 before taxes and inflation.
Recently, I learned about another insidious money sink that seems to target young people: microtransactions through apps, video games and livestreaming services. Game developers who sell virtual trinkets for a nonexistent world and online entertainers who respond in real time for a fee make the process easy and cheap so that their audiences will spend again and again.
Preparing for college and adult life does come with some expenses that can’t be eliminated. My daily cold-brewed coffee costs me 25 cents to make at home compared to buying it for $4.50. Small habits like this one add up over time.
For my students, doing better in school means more options for getting out of college debt free. For example, tuition and fees at the University of New Hampshire could run more than $19,000 for in-state students. However, Manchester Community College would cost closer to $7,000 a year and serves as a springboard to completing a four-year in-state degree because of automatic transfers to four-year schools.
The $1.50 morning coffee doesn’t seem like a lot, but compound it over a year with other wallet-draining habits, and high school students can easily find themselves in a financial pit long before starting college. Saving the buck fifty today becomes part of tomorrow’s debt-free college and even early retirement. It starts with a good night’s sleep, continues with a healthy breakfast, and accelerates by passing tests and being ahead of the scholarship game.
Getting a quality, affordable education can seem daunting. Not everyone can afford the University of New Hampshire. At the same time, some students’ career aspirations require more technical education than that which is offered by my alma mater, Plymouth State University. The students I see working hard and spending smart now are the ones who I’m confident will have the greatest freedom of choice in the future.
Alex Ward has taught high school economics in the Seacoast region since 2013. He has been a licensed Series 6 and Series 65 financial advisor. Ward lives in Nottingham.
