Tuesday, August 3, 2010

Do Your Children a Favor: Don't Send Them to College!

Hardknocks and I differ on the perceived necessity of college.  I think, and I'll let her speak for herself, that she believes it's valuable at a certain price. I think it's wholly unnecessary.  There's reasons for why I feel that it's unnecessary.  For one, I did the smart thing and stayed home for college.  Because of that shrewd move, I didn't get the "college experience" and do not value it.  No, I never did the "walk of shame" and I never up-chucked all over my dorm room. I think I'm a better person for it.  Secondly, my little sister was the "lazy one" who didn't do well in school.  She was the bane of my parent's existence.  She went to two years of college to appease them, then went into a business where college is not necessary (or where no one asks her about it) and she is more financially solvent that I am--by far.  So, I'm a little burnt on college. I believe in life experience. I travelled for an entire summer after college and learned more during that time, than college could ever teach me.  I advocate giving your children real life experience.  

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.  


  1. Some of your foundation for your argument is a little flawed. There are some professions you simply cannot enter without a college degree. You cannot enter finance without having gone through a formal education. You cannot become a chemist, an engineer, a whole multitude of things.

    $200K on a college education? I keep hearing these stats about 6 figures... I went (away) to San Diego State. I think my parents spent $40K including room and board. tuition's gone from $888/ unit to something like $1300/ unit, with housing costs... let's say it's $70K now. That's a lot, but it's not $200K. Private school is only an option for the wealthy who need only ask what size check to cut. Those who go to private school for undergrad while taking on debt are fools.

    All that being said, Yes, college is overrated. Unfortunately, a bachelor's degree is more or less required for even an entry level job nowadays, unless you can score some experience some other way (contacts, family business, etc)

    Calling all of college a scam is as simple and conclusory as saying college is perfect for everyone.

  2. PS I meant $888/ semester. Wow that's a huge difference.

  3. You are absolutely wrong, I have friends that are in "finance," making 6 figures or more for companies like H&R Block, Edward Jones, and even some other brokerage firms who do not even have a bachelor's degree let alone the much celebrated MBA (and they are the ones doing the trading & advising not sweeping the floors--for that you need a JD & apprenticeship).

  4. It doesn't take a 4 year degree to enter those professions, and there is no guarantee that with your degree you can even enter those professions, in fact, the opposite is true.

    Most of the chemists and engineers I've met went to local schools for cheap. I've never met a Harvard DEA agent, but I have met one from San Diego State.

  5. First of all, how many people will ultimately end up working for a company full time with benefits? There are more independent contractors today than ever. And that is not everyone's dream job. Some people would much rather do something else. Several of the most successful people I know never finished college. Once you get in, through nepotism or experience, NO ONE asks to see your diploma. I didn't even produce my last semester grades to Law School until my 3L year. AND, even if you get that entry level position based on your Undergrad GPA... how long will you last there?

  6. A college degree is worth it because most professional jobs require a college degree. I am sure there are people who do well without a high school diploma too, why not tell people to start dropping out? At some point it becomes ridiculous to point to a few individuals who did well without a college degree, while ignoring everyone else that did pretty well with a college degree or the people who are struggling without a college degree. Look at the unemployment numbers for people with college degree (something like less than 5%) vs. people without one (something like more than 8%).
    The message should be go to the cheapest college you can, not don't go to college.

  7. The majority of Americans would be able to go to college IF colleges weren't so damn expensive, and that is largely the fault of greedy tenured professors and money hungry deans. I also believe that college shouldn't be 4,5,6 years. Most students would be able to graduate in 2 to 3 years if it weren't for ridiculous money making requirements set by their college. It's the same money making scheme that forces law students to spend three unnecessary years in law school.

    There is no such thing as a "cheap college" if you are looking to go to most of the schools listed in the top tier of USNWR unless you get a ton of scholarships and financial aid. And the goal for most ambitious and academically gifted is still to get into the highest ranked school they can get into.

    Most 18 year olds have no concept of savings and debt. They are just brainwashed by parents, teachers, the media, and USNWR to believe that a higher ranked school equals more prestige and better job opportunities to pay off the high tuition.

    Anyway, what is the point of getting good grades so you can attend Podunk University with someone who got a 2.0 in high school? The US does not reward good students who aren't rich. Poor and middle class students are punished either with life crushing debt to go to a prestigious school, or they are told that despite all of their hard work they will never reach the coveted top tier school or Harvard because they weren't born into a rich family. That is NOT how the higher education system should work. The Ivy and top public universities should be accessible to anyone with the grades to get in, not just the rich.

    Anon @ 11:52: You sound like a delusional academic when you spout off those employment statistics. Just stop with the lies and bogus statistics. We might be on the same side on this issue, but stating that the unemployment for college educated youth is less than 5% just makes you look like a foolish shill. I can't believe you expect anyone to believe that.

    1. Those who have no concept of savings and debt were raised by idiots who fucked their kids over by failing to teach them the fundamentals of life. it really is that simple.

  8. I do not think college is a total waste as it is the minimum requirement for a lot of jobs today. However, I do not think a BA/BS is a golden ticket to success. I know a lot of people with college degrees that are temping because they could not find permanent jobs and this was the case even before the Great Recession.

  9. Hardknocks, you're absolutely right on the grades issue. The main reason I went to college was to get out of the town I lived in & would have just ended up a single mother or in a teenage marriage. Most of the young women there get married, have babies & spend their lives living with their parents or with a guy who didn't go to college (if they're lucky).

    I used that very argument to fight my undergrad when they tried to use my finances to deny me things; it's also a reason why I'd like to see reform in the system.

    I don't spend time regretting my life since had I done it differently, I'd probably be dead or in prison. However, there's always the community college for 2 years then transfer route. Or perhaps cosmetology school or another trade. Better yet, do what you want to do & be mature enough to deal with whatever comes of it.

    1. A fucking men. exactly. two years to get the same shit classes you get everywhere and then finish it at the big school. you do it right you walk away with almost zero debt.

  10. There are a few high schools that allow kids to get dual credit at both the high school and community college level, so that they graduate from high school at approximately age 18 with two years of college completed. This ought to be a MUCH more widespread opportunity, with every large city having at least one high school offering this option.

    I think a lot of the home schooling kids now have a high school diploma by sixteen. The whole high-school prom and homecoming game hoopla does NOT interest many teens, and they aren't "missing" anything if they would not have wanted to participate in the first place.

    Let teenagers finish junior college by age 18, spend a year in Europe or in an apprenticeship, and then get a job and finish the last two years of college part time.

  11. I agree with HardKnocks on this one. College can really expand people's minds - especially sheltered American youths. However, it is CLEARLY too damn expensive. This is due to an endless supply of federally-backed student loans.

    Here are my suggestions: drop out of high school and earn a GED byage 16. Go into the trades, and develop some portable skills. (Or one can finish high school and do the same thing.) As an added bonus, you will also be making money at a young age in a real job.

    Another route: go to community college for two years and transfer to a state school, where you can still live at home to cut back on expenses. Or go to a high-ranked college IF you receive a big-ass scholarship to attend.

    The reality is that many employers have used a Bachelor's as an artificial barrier to employment, i.e. you certainly DO NOT need a 4 year degree to be a manager at a department store. However, employers want to make sure you can jump through the hoops. I guess they need some way to measure applicants, and they can no longer use IQ tests.

    I also like how those who disagree with the scam-busters come up with the straw man that we think studying math and hard sciences will open up a world of possibilities. This is not the case, and many of us have actually pointed out that jobs in those fields are tough to come by. To the industry apologists, did either of my suggestions mention these areas of study?

  12. @EvrenSeven
    When did you attend/graduate?
    I started in 2001, and without scholarships, the cheapest in-state school (with an engineering program) was 12K a year for tuition (student budget figured another 6-10K for annual room and board expenses. The average for the other schools I was accepted to was between 22K and 26K, as each was out of state. If I had to pay that with loans, there's not much chance I wouldn't have arrived at a six figure debt.
    The Google Search I just ran suggests that SDSU is 10K in tuition, and 3k in required fees, with another 10k projected for housing. Just shy of 100k over four years.

  13. Reading enough books and watching the History and Discovery Channels can make you smarter than the average college grad. I know plenty of people like this and they do just fine.

  14. Whether a college education teaches you necessary skills for the "real world" depends on your major. I was a biology major, and most of my friends were computer science or engineering folks. You can't even get in the door in the sciences without at a minimum a bachelor's degree. Though these days even that's often not enough.

    On top of that, many, many employers won't even look at someone without a bachelor's degree. I asked my SVP of HR about that one day after someone I had referred for a job got nothing for months and then got an interview and offer as soon as he got his bachelor's degree. He said that when we look to fill entry-level positions, college grads will always get the nod over non-grads (even ones with work experience) because the grads proved that they can be dedicated to something for the long haul.

    I don't know if I believe the underlying assumptions, but whether they're true or not is completely irrelevant. Unless you go into the trades (and if you do be wary of for-profit scam schools who will try to sell you useless training) you pretty much need a bachelor's degree to get in the door.

    I *do* agree that an undergraduate education at a so-called elite school is a waste of time. Chances are you'll have the same TA's and grad students as everyone else and you'll pay a lot for the privilege. But there are ways to get a really solid college education without going into debt up to your eyeballs.

    For ex, at a nearby community college, district residents pay $91 per credit hour. That's about $3000 per year in tuition. After two years, you can transfer to a public school to save more money and minimize your debt burden.

    From a purely pragmatic standpoint, if you want a job that involves sitting behind a desk, you need the degree. It almost doesn't matter what the degree is *in.* You just need one.

    1. Their assumptions in this case are unwashed bullshit IMO. A college education means you paid your dues, sat through the same crap everyone else did, learned the same shit and along the way simply learned how to THINK like everyone else. I haven't noticed college graduates were markedly smarter or more intelligent than non graduates actually. And yes I have been a hiring manager.

  15. what kind of country do you want the united states to be if most people are not educated? it's the success of higher education that gives this country the innovative edge over the rest of the world. You keep on knocking on higher education, but without that education and those educations, we'd be a backwater with no soul or future.

    now, if you have a problem with the cost, that's another issue...

  16. Spengler's Shop RatAugust 4, 2010 at 1:51 PM

    When Robert McNamara (Sec Defense during Vietnam War) went to Berkeley in the thirties, he paid $52 annual tuition. That's around $800 adjusted for inflation.

    Education is not the problem. The price tag is. On top of this are the declining opportunities for individuals at all levels of educational attainment. Sprinkle in a little bit of marketing and you get the education arms race. Everyone thinks more school is the way to maintain their standard of living - which has has been declining for decades at nearly all levels of the income distribution. Everyone natters on and on about 'STEM' fields, but we can't all be geneticists and electrical engineers.

    Some people might get lucky and land a pimp apprenticeship at the union hall right out of high school, but that's hardly guaranteed. And even if they do, they still bust ass for $10/hour for five or six years. This might seem better than paying three arms and two legs for your education. But you wake up every morning feeling like you were beat with a baseball bat the day prior, and you wonder. I know I have.

    To paraphrase a wiser man: this country threw the average worker overboard thirty-five years ago. And now it's headed for the dumper.

  17. Would you see a medical doctor who has no college degree? Would you let that person operate on you? An education is important, it is just overpriced!

    1. For SOME professions such as MD it is indeed mandatory. For most others? Um no.

  18. $200,000 is a little high, unless Mum and Dad want to send their precious darling out of state to a trendy, small, designer, liberal arts college 95% of the country has never heard of.

  19. Most of the firemen and cops retiring at age 50 with $50,000+ pensions and life time medical and COLAs didnt go to college.

  20. if you think college is the same as sitting around for a few years and just reading books, then i feel sorry for you. it's not that i disagree with many of your points, but does the term "well rounded education" mean anything to you? or "Socratic Method?" the college experience should and can also include learning about and living things like highly competitive sports, political and social activism, exposure to the arts and experimental culture, and of course sex, drinking and doing good drugs.

    i went to really good schools for most of my life as a student. i got the best education someone else's money could buy. i am not sorry. i'm not rich, but i am free, intellectually speaking. that is something that has no price i can name. completely worth it. if your college and grad school experiences were different, i am very sorry about that. but you'll never convince me that what i experienced wasn't good, or that everyone should not have a chance to try it.

    ...oh dear, i'm not sure this comment went thru. forgive me if this shows up as a repeat.

  21. watching the History and Discovery Channels can make you smarter than the average college grad.

    i won't speak about the intelligence of "the average college grad," but watching TV almost never "makes you smarter." it's very sad that so many people in this country believe other wise. and jsyk: i know and worked with people who are on the HC and DC as "experts." trust me when i say you're not getting their actual expertise so much as you're getting something to entertain you. the good stuff they save for... well, the classroom.

    cost is obviously the problem. a big part of that has to do with the way many schools have gotten addicted to the endowment game. there's a great piece by an econ prof at one of the california schools, sorry i can't find the link just now. but his point is this: "the cost of education" *has not* really increased by 8 or 11% or whatever over the last few decades. what has increased is the greed of the administrative class, and their corruption, at most big or good schools. stock market mania, and speculation and certain careers tied to certain endowments and the size of them... you get the drift. but the expense of running most schools really hasn't gone up that much, nor has housing, teaching and otherwise educating students, at least not more than ordinary inflation of everything else.

    imho, the corporatization of higher education is the problem, like so much else in america. get the bean counters and suits out of the mix, and go back to good old fashioned inept intradepartmental wars over ideological fashion trends, and we can educate most people cheaply again. it's been done, so it's not a question of "can we do it." the original GI bill is a good model upon which we can start.

  22. I am an RN who "apprenticed" at a British hospital , class for 6 weeks , work in the wards for 6 weeks under the direction of RNs and instructers for a period of 3 years. It was a great experience and I got paid and passed Boards and have made a good living here in USA ( would also have made a good living in Britain with better benefits I might add) but I wanted to travel . I never had the college experience and I have to say I think it is over rated, we got lots of healthy discussions in our nursing class because those women came from all over the world, Hindu , Muslim , Chinese, Irish (me ) and a few British upper class " daddy is a doctor you know " ( but I am too dumb to get in to med school lol ) so we had lively debates . I think travel is a great teacher , especially if you work in another country . I sent my daughter to Ireland ( it has the highest min, wage in Europe ) and she worked in a Cafe for 18 months and learned a lot . If you are not mature enough or you are a restless soul like I was college is a waste of money .

  23. Going to college to complete a four year degree (or higher) demonstrates a high level of smarts, mental discipline, and emotional maturity. It is this accountability that makes a person attractive to an employer - knowing that your employee can handle complex mental challenges with looming deadlines.

    Having a degree is a certification in our society that you have these skills, and it separates you from those who have not earned any such degree.

    1. Um no it does not. it simply teaches you to think like everyone else which is what business wants.



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