It’s a conversation many of us have over the dinner table or with our colleagues at work: “I can’t believe the cost of college.” It is a very reasonable statement when you consider that many private colleges cost $40,000+ per year. My alma mater, New York University, is now over $50,000 per year. The question I keep coming back to is whether or not it’s worth it. I think the answer was a resounding yes up to the point when I graduated college (2004) but since then, a college education seems to be doing more harm than good for many, many people that I speak with. That’s not to say it’s wrong for everyone, but perhaps the decision to attend college, especially a private college, deserves a lot more contemplation than it has in the past. A recent article in Money Magazine ponders some similar questions and covers some specifics that I think my readers may find interesting.
First, who should go to college? Studies show that people with specific degrees in science, technology, engineering, and math tend to earn more money than those with liberal arts degrees. It makes sense, right? If you have a technical skill that is desirable in the work force, you will very likely earn more money than somebody who studies a broad range of topics in college without specific direction. Thus, if you start your post-high school education with the knowledge that you’d like to be a doctor, a computer programmer, or a math teacher, you can feel more confident when paying (or borrowing) tuition funds that you’ll earn enough money in the future to make it worth it! Along those lines, if you are seeking a liberal arts education, perhaps try to obtain it from a city or state school and not a high-end university. If you plan on attending grad school, perhaps invest more in that leg of your education instead.
Next, I think focusing on the price of college must become considerably more important in the process of selecting a college. Where I live, on Long Island, people focus on where they want to go to school, first, and how much it costs, second. Many people end up going to expensive colleges like Syracuse and Emory because they have friends who go there, not because they have determined that school to be the specific best fit for their educational needs. This paragraph is certainly more relevant for those borrowing money than those who have the benefit of having parents pay for your education.
People love to say that “college loans are good debt” because they often lead to more money in the future. Let me say loudly and clearly that NO debt is good debt; some debts are just more logical or necessary than others. I truly believe if you need to borrow more than 2 years of your school costs, that school costs too much for you. You will not appreciate having to pay $500-$1000/month back to your school for 10 years after you graduate, especially with the tough job malaise we’re experiencing now. I do blame government programs which make borrowing money so easy for part of this problem. Now that student loan debt is over a trillion dollars, the government should put the brakes on these programs before this makes our economy even more vulnerable than it already is.
It seems crazy to suggest that only wealthier people should attend college, but I think opening college up to the middle and lower middle classes to the extent that we have over the past 2 decades is starting to have an adverse effect. I can’t tell you how many parents and recent grads reach out to me asking if I know of any job openings. These are well educated people, often with law degrees, trying to sniff out a $50,000/year jobs.
Let’s take the same care with our education decisions that we would with other parts of our lives. Higher education is important but take a step back and try to plan out what the next 10 years of your life would ideally look like. It may not be 8 years of school. Maybe it’s developing a technical skill and getting a job sooner than later. Maybe it’s something truly creative and entrepreneurial. Just take some time and think about it.
As always, feel free to reach me with any questions or concerns.
Premier Financial Advisors, Inc.
14 E 60th Street, #402
New York, NY 10022
P: 212-752-4343 *231
Securities and certain investment advisory services offered through: First Allied Securities, Inc., a registered Broker/Dealer. Member: FINRA/SIPC. Premier Financial Advisors, Inc. is a Registered Investment Advisor. First Allied Securities & Premier Financial Advisors are not affiliated entities.