Karate for Kids

Friday, August 22, 2008

$$$-Today's College Cost. Is College Worth it?

I know some of you are screaming at this blog, YES YES YES, of course College is worth the cost.

But be honest, many of you went to college in the 1970's, 1980's and 1990's, when College was relatively inexpensive COMPARED TO TODAY.

Today, a 4 year Private School Bachelors Degree, including tuition and living on campus, is 100K-175K. That's right, $100,000!

In the past 5yrs. public Colleges have raised tuition 31% and private Colleges 14%. Last year alone Illinois raised tuition 12% and Colorado raised tuition rates 16%. This is WAY faster than both inflation and more importantly families salaries.

This is why if I were President, I would call for a moratorium on tuition hikes and overall College costs for the next 5 yrs. After that, I would cap the tuition costs at no more than the rate of inflation.

If we don't get a grip on these out of control College costs, soon only the RICH will be able to afford College. Do we really want that kind of society??

And what does that 100K degree get you in terms of starting salary? Between 40-60K.

My 4-year degree cost me about 10K. I graduated in 1994. My education was at a community College for 2 years and 2 years at a public 4-year College. Now going that way would cost 25K. Most of that 25K would be from the 4-year public College.

Plus, after decades of steady increases, the median salary for workers with a Bachelor's degree FELL 4.6% from 2001-2006. However, workers with Professional degrees (MBA, Masters, JD) salaries shot up 4.3% in the same period. This suggests the obvious. Save your money to get that MBA vs. the Bachelor's degree.

But the family that goes deep into debt to pay for their kid's 100K Bachelors degree, in my opinion, is making an investment that is not good.
It is one thing for the person who is getting the degree to go into debt to get that degree, but I think that responsibility should not be put on the parents. In otherwards, you want a college degree, YOU SHOULD PAY FOR IT.

Now I know many of you will disagree with me on this. Certainly, I am not against helping your kid out with College expenses, but not 100K help (unless you have unlimited funds that you want to blow).

What is so wrong with going to a Community College for the first 2 years to save BIG MONEY?

Who cares what the Jones say anyway.

Once finishing that 2 years at the Community College, then I would also recommend (if possible) living at home while attending the last 2 years at the 4-year College. This is a great way for the parents to help. Rent free living while in school will save big $$ vs. living "on campus".

My feeling is, get through College as cheap as possible, taking only the necessary courses to finish with your degree.

Obviously, I think you should take what you are interested in vs. what may only pay well, because doing what you want in a job is PRICELESS compared to being stuck in a job that you hate, only because it pays well.

Here's my reasons for thinking that a 4yr Bachelors degree (one that you are paying 100K for) is overpriced.
  1. Search engines such as Google (nasdaq: GOOG - news - people ) have ushered in the era of open-source learning. Society is rapidly progressing to the point where any Googler is on equal footing with a Widener Library pass-holder.
  2. Most of today’s higher-paying jobs go to those who exhibit a combination of adaptable intelligence, numeracy, communications skills and a strong work ethic, as opposed to evidence of specific knowledge.

3. Which leads to a third, and no doubt controversial, point. Society once counted on universities to imbue students with the traits named in the paragraph above. It was once assumed, for instance, that a liberal arts degree holder was numerate and literate and knew how to draw lessons from history, weigh evidence, think, write, speak, debate and learn. Or so Larry Summers, the ex-Harvard president, innocently imagined. He thought undergrads should learn about the math-and-science-driven world they’d be entering as adults. This belief conflicted with the postmodern professoriat that prefers cutting rap records to teaching--or, if forced to teach, teaches liberation theology over the American Revolution. Summers lost the battle.

The same forces--technology and globalism--that quelled the wage growth of blue-collar workers may do the same to white-collar workers. Already software writers feel salary pressure from India, cartoon animators from China, classified ad salesmen from Ebay and so on. Despite this, you may conclude that my opinion of the worth of a college degree is nonsense. Degrees have always gone up in value, you think, and always will.

Okay. Allow me to pose a question. Suppose you are an employer and are filling jobs for which no credential is required. In other words, for typical white-collar jobs--product design and engineering, sales, marketing, non-CPA accounting work and so forth. Would you pay a steep salary premium for a four-year degree holder versus a high school grad? You might. Perhaps you’d think the four-year degree speaks to the job applicant’s intelligence, along with a certain facility to set goals and finish them.

But what if you could guarantee those qualities in other ways (military service, missionary work, etc.)? See, I think the Harvard or Yale degree is worth plenty, not because of what Harvard or Yale teaches--the postmodern university can do more harm than good; witness Yale’s admission of a former Taliban spokesman. The degree simply puts an official stamp on the fact that the student was intelligent, hardworking and competitive enough to get into Harvard or Yale in the first place. May I present to the jury Bill Gates? He was smart enough to get into Harvard. Then he proved his financial intelligence by dropping out to start a company.

Why does the price keep rising at these 4-yr. Colleges?

Well for one thing, dumb parents are lining up to hand over $$ checks to these schools.

Families seem to equate the higher price tags with a more quality education.

DUMB DUMB and DUMBER.

If Colleges were spending most of their money on initiatives that improve the quality of education for students, you might regard price hikes running at 2-4 times the rate of inflation as a necessary evil. But instead Colleges are spending their money on palatial dorms, state-of-the-art-fitness centers, hot tubs big enough for 15 people, and a panoply of gourmet dining options.

Now you are saying, "So that is where my 100K went"!

Like oceanfront property, degrees from Harvard/Yale will always command a premium and will probably pay out a terrific ROI. The same is true of degrees from 10 to 20 other private colleges. But beyond those 10 to 20 schools, I suspect the price of a four-year, private college degree--$100,000 to $175,000--will be money poorly invested.

Come on people, let's stop being scammed by these Colleges.

Jimbo

2 comments:

Unknown said...

i go to Washington University in Saint Louis. Not as a prominent name as Harvard or Yale but in the top 20, but costs 50,000 K per year. You think it is worth the price? I am still in doubt.

Jimbo said...

My whole article is to give you that doubt. I think College costs way too much. They are ripping off parents by the truckload. If we don't put a stop to crazy College cost increases, only the RICH will be able to afford it.