Ann Johansson for NBC News
Lewis Lemons III, 32, was forced to move out of his apartment and now sometimes stays in a motel room with his twin 9-year-old sons, Avery and Jayden.
By Allison Linn, NBC News
The weak economy and high unemployment have prompted many adults to head back to the classroom, armed with the promise that more education will bring them a higher paycheck and increased job security.
But now, some are learning the hard way that just earning a degree isn’t a guarantee of a good paycheck -- or any paycheck at all – when the job market is so difficult. That’s leaving many Americans saddled with high student loan debts and frustrated by low job prospects.
It is still true that it generally pays to get a college degree. The median weekly earnings for a person with a college degree is $1,053, according to the Bureau of Labor Statistics, compared with $638 for those with just a high school diploma. Plus the overall unemployment rate for college graduates, currently at 4.1 percent, is less than half the rate for those with just a high school degree.
But experts say there are some caveats. Increasingly, the choice of what – and where – you study, and how much debt you take on, can make a huge difference in determining how well your education will pay off.
“No one ever says that going back to school or getting a degree is a promise,” said Sandy Baum, a senior fellow at the George Washington University graduate school of education, who co-writes an annual report on student aid and college pricing published by the College Board.
Economists also have found that people who graduate from college in a weak economic period can see a long-term earnings disadvantage, compared with those who graduate when the economy is healthier.
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“They get trapped in jobs that are little bit lower status, a little bit lower paying, than they might have been,” said Don Hossler, an education professor at Indiana University in Bloomington who has studied enrollment trends for decades. “And as time goes by, they’re competing with more recent graduates.”
The situation can be discouraging for people who held steady jobs when times were good and now are armed with a degree and few good job prospects. That is the situation facing Lewis Lemons III.
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In 2006, Lemons made a decision that seemed to make sense at the time: He quit his $20-an-hour job to go back to college with the hope of moving up the economic ladder.
As a returning student, he had plenty of company. Between 2000 and 2010, there was a 42 percent increase in students over age 25 enrolling in postsecondary programs, according to the Department of Education. That compares to a 34 percent increase in enrollment of students between the ages of 18 and 24.
Six years later, Lemons has an undergraduate and graduate degree and is close to getting his MBA. He also has about $80,000 in student loan debt and, after a stint of unemployment, he just landed a contract job -- at $18 an hour.
In retrospect, he says quitting his job to go back to school “was the worst decision I ever made.”
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Lemons, who is now 32 and lives in Riverside, Calif., was working for a big health care company when he decided that he wanted to go back to school to study psychology. Although the job was steady and the benefits were good, he saw no career path in it.
“I figured, I don’t want to be making $20 (an hour) for the rest of my life,” he said. “But look where I am now.”
He graduated with a psychology degree from UC Riverside in 2009 as the recession was officially ending and the unemployment rate was topping 9 percent.
He soon landed a job doing social work, which he loved, even though it paid less than he’d been making before he went to school. Hoping to build a career in the field, he enrolled in a graduate program in psychology through National University, a large, private, nonprofit education system.
He lost his social work job in 2011. Since then he’s held some temporary jobs outside that field and has been working to finish an MBA from National University.
Ann Johansson for NBC News
Lewis Lemons III helps son Jayden with his math homework as twin brother Avery plays in the background.
There was a time when just having those degrees might have been enough, but the changing job market has made that less of a guarantee.
An analysis of government data conducted by Georgetown University’s Center on Education and the Workforce found that people are much more likely to get a job out of college if they choose a major with a clear career path, such as business. They also stand to make a lot more money if they choose a major such as engineering than if they choose one like psychology.
Still, the same Georgetown researchers also found that in general, people with a college degree have fared better in the weak economy than those without.
Experts say college students, and especially those who are returning to college later in life, need to be especially savvy about choosing the right school and major. And Baum, the researcher, notes that they can’t necessarily count on their educational institution to be giving them the full truth about whether the degree they are pursuing will pay off.
“The fact is, there are schools out there that don’t care. We wish there were not but there are,” she said.
Lemons said he always dreamed of going to college, and he thinks his degrees should show that he’s a hard worker who is trying to improve his skills.
But sometimes, he fears that they hurt him because people will think he’s overqualified.
Meanwhile, his bouts of joblessness and low-paying jobs have put a serious strain on his finances. Lemons has had to file for bankruptcy and was forced to leave his apartment in July to avoid eviction.
He and his two boys, who are now 9, have been staying with his mom and his sister or at a hotel until he can get back on his feet financially.
He’s even had to accept food stamps.
“It’s embarrassing to say, but I went from being a social worker to being on the program,” he said.
Lemons said he doesn’t blame anyone for his decisions. Still, it’s hard to accept that he will may never own a home or be able to help his kids pay for college because of the burden of his own $80,000 in student loan debt.
Unless he is able to land a six-figure job, he said, “I’ll never have the American dream that I signed up for."
Lemons’ debt is higher than many others'. But the nation’s rising levels of student loan debt has started raising alarm bells for some economists, who worry about the long-term effect that debt burden will have on their ability to do things like buy homes and cars, and retire.
By some government estimates, the nation’s total student loan debt burden now tops $1 trillion, more than Americans' credit card debt.
On an individual level, people who go to for-profit schools such as DeVry and the University of Phoenix are much more likely to borrow, and debt loads are much higher. They also are much less likely to complete their degrees.
Many see the for-profit schools as a convenient way for older students to earn a degree while working during the day or attending to family needs. But lately the programs have come under more scrutiny.
For students who got a bachelor's degree in the 2007-08 academic year, the median debt load was about $7,960 for public institutions, $17,040 for private, not-for-profit institutions and $31,190 for-profit institutions, according to the College Board. That includes students who graduated with no debt.
About 65 percent of people at private, nonprofit schools, and 56 percent of people at public colleges, graduate with their bachelor’s degrees within six years. Just 28 percent of students at private, for-profit schools complete their degrees in that time period, according to government data.
Hossler, the Indiana professor, said student loan debt is a thorny issue. Many people agree that the nation needs to get a better handle on ballooning debt loads. But if there are more rigorous thresholds for who can take on such debt, then there is the risk that low-income Americans will be excluded from the option of bettering themselves through education. That’s a major tenet of the American dream.
Some economists also note that taking on some debt for an education isn’t a bad thing, as long as you are careful and make sure it pays off.
“There is a tradeoff between how much debt you’re willing to take on and … what sort of boost you can expect to your lifetime income,” said Paul Ashworth, chief North American economist with Capital Economics. “But in general if people are borrowing to improve their human capital then, as an economist, I’m happy about that. I’m a lot more happy about that than if they’re borrowing for an already-overpriced home.”
Related: Read previous stories from the Down the Ladder series.
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Carmen Wong Ulrich, president of Alta Wealth Management, says that a delay in paying off your student loans may not be a bad idea if your short-term return, such as a higher-paying job, is helping you get ahead.
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