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Investment Comparison: College versus Car?

College vs. Car

U.S. Auto Loan Amounts Outpace Student Debt, But Fail to Deliver Similar Long-Term Value for Americans

Asset Values, Costs Vary Widely Over Short, Long Term

Michigan’s Independent Colleges and Universities (MICU) today released its comparison of U.S. automotive debt to student loan debt, and the results are striking.

Average outstanding auto loan debt is 21 percent higher than average student loan debt. While more people own cars than have degrees, autos quickly lose value while the worth of a college degree actually grows over time.

“After just five years, a college degree holder has gained an average of $315,567 additional income over a worker with a high school diploma alone,” said Robert LeFevre, MICU president. “Compared to an average vehicle value of $12,758 after five years, it is clear that the college degree is a better bet in both the short and long run.”

The average car loan began to outpace the average student loan in 2001. By the third quarter of 2017, average outstanding student debt begins to level off while automotive debt is still increasing rapidly.

“The public tends to accept the new automotive technologies as baked in and necessary values that are worth the price. But even though new research tools are similarly required for today’s degree programs, the public protests those additional costs loudly even though study after study confirms the increased value of a college degree.”