So, Demosthenes of America sent me this article that supports my position. He cites seven reasons why he, and others, should not send their children to college. The bad news is that Mr. Altucher is taken, so I can't make a grab at him. He is so damn smart. There is no good news. So, are you dying to hear the reasons yet? Here they are:
Here they are (my commentary in italics):
1. More than 60% of people entering college take more than four years to graduate. So whatever you think your kids are going to cost you to go to college, add 20% to 100%. Actually, I know people that have stretched it out to 6 and more. Sometimes, they aren't ready to be in the real world and sometimes the schools screw them into staying a bit longer. See my post on No Sucker Left Behind.
2. The cost of the average college tuition has gone up nine-fold since 1976 versus seven-fold for health care and three-fold for inflation. Yet the news focuses on the cost of health care. Not to mention the fact that college doesn't get you nearly as far as it did in the 70s.
3. The differential in lifetime income between a college graduate and a non-college graduate over a 45 year career is approximately $800,000 (read on). I'm pretty sure this stat has been totally debunked. At the very least, it doesn't apply across the board. If you're less industrious youth with a B.A., you will earn less than an industrious youth sans B.A. à la my sis.
4. If I put that $200,000 that I would've spent per child to cover tuition costs, living expenses, books, etc. into bonds yielding just 3% (any muni bonds) and let it compound for 49 years (adding back in the 4 years of college), I get $851,000. So my kids can avoid college and still end up with the same amount in the worst case. Wow. I think I would trade in my college education for that windfall when I'm 49. Not that my parents paid for education... they didn't.
5. If smart, motivated, ambitious kids (the type of kids who get the most out of college) avoided college I'm sure the differential would be a lot less than $800,000 and may even be negative (i.e. they would make more if they avoided college and started going into the business world earlier). See #3.
6. The average debt burden of a college graduate is $23,000. Up from $13,000 10 years ago. Students with professional degrees can see their debt burden go higher than $200,000. Total student borrowing has topped $75,000,000,000. It's too much for young adults just starting their careers. Of course, props to Mr. Altucher for mentioning professional degrees,my brothers and sisters in the law who are saddled with over $100K of debt. With less and less of a ROI, it's almost criminal to encourage your children to pursue law school on their own dime (plus interest compounded).
and the best point of all is the following, which includes options that I regularly reference (which I bolded and italicized):
7. Alternatives to spending $200,000 per kid so they can waste four years of their lives:
Give them $20,000 to start one to five businesses. Most businesses fail but that's OK. The education from the process lasts a lifetime and the network you build when you start a business will lead to many future jobs and possibilities.
Travel the world. That would be an education that pays many dividends and is much cheaper. Your kids can then go to college with a much more mature view of the world.
Work. They won't get the best jobs but they can make money, network, get a "hands-on" education, learn the value of money and go to college in their 20s when they can afford it -- and make every dollar worth it. Plus your kids will have a more clear idea of what they want to do in the world.
Volunteer. Let them see a side of life that is harder and where they can add value. An education like that is invaluable.
Do nothing but read. Get the benefits of a college education without paying the $200,000. I'd be happy to support a child that wants to home school a college education.
Please send this to all of your friends with children, or friends who plan on having children. We need to do some major reprogramming of American minds when it comes to the necessity of an education.