There’s a lot of talk these days about what we, as a nation, should do about the ever-increasing problem of the entry-level workforce being smothered by loans. The same loans that they were told to take on, so they could get hired for their dream job…just by graduating from college.
But no one is talking about how easy it is to rack up those loans. Or how to minimize the amount you need to take out. Or if you should even go to college in the first place.
In my opinion, it all comes down to questioning the social norm that everyone needs to go to college. Most people applying for student loans are just out of high school. They have a decent education, but most likely lack any practical knowledge of personal finance. They’ve never paid rent, bills, or managed a grocery budget.
Their job was to graduate high school. Should they go to college? Of course! Everyone should go to college, right?
They are bombarded by teachers, counselors, and parents telling them that the way to their best future is through college. But no one emphasizes the effort another four years of school requires. Or the cost of schooling and living. They are told to get a work study job and take out some loans.
And it’s completely ok to take out student loans to pay for college because it’s “good debt,” right?
Besides, you’re salary is going to be so much higher if you get a college education, right?
….Right? … … Bueller?
The Myth that Everyone Should Go to College
According to the Bureau of Labor Statistics, if you have a high school diploma, you can make around $718 per week or $3,111 per month as of 2017. (This is a median number, not an average. And I’m assuming this is before taxes are taken out as well. Either way, the point will still be the same.)
The BLS also says that if you have a bachelor’s degree, you can make around $1,189 per week or $5,152 per month as of 2017. So you can get 65% more money by spending four years and a good deal of money in college. It’s really not a bad trade if you do it right. And college is fun.
But that’s really only looking at one part of the equation. Collegedata.com has the average cost of in-state tuition for one year as $9,970. That’s $39,880 for a four-year degree. So what happens if you go to college for a year or two and decide that it’s not for you?
If you decide to end your college career after two years, do you still have to pay that $19,940 that you racked up in tuition costs for the few you attended college? You sure do. And do you have anything to show for it? Not really.
I can’t tell you how many of my friends from high school went to college, made it to their senior year only to stop a few credit hours short of their degree.
Should they have gone to college in the first place? Probably not.
One should have studied for her real estate license and then reassessed if she wanted to go to college later. She was a junior when she realized she was done with college.
One should have stayed with the job he had in high school. He went back to his same position after three and a half years of college and is now the VP of Operations. (No joke. He still doesn’t have a BA.)
My best example of someone who shouldn’t have gone to college in the first place, actually didn’t. He went to a trade school to become an auto mechanic. 16 months later, he had a job as an apprentice. Now he’s an ASE World Class mechanic and the top mechanic at his company.
Don’t get me wrong. College is great. But it’s not for everyone. If you want to become a doctor, teacher, engineer, etc. then college is the way to get you the career you want. If you love to learn or want to learn how to think more critically, then college can be a great place for you.
If you weren’t a big fan of the classes in high school, then maybe look elsewhere or read on to my next point.
The Price You Pay for College
There are many types of colleges. Community Colleges, Public 4-year Colleges, Private Colleges, and For-Profit Colleges. And it’s going to depend on your goals as to which is the right kind of school for you or your kids.
To be blunt, in many cases the first two years of your college career is very…extremely similar to high school. They call it a “well-rounded education.” I call it “we don’t have enough to teach you in four years.” Not to mention, that well-rounded education hasn’t kept up with the changing times. For example, Arts and Humanities credits are required, but any kind of personal finance or computer science class you can pass on.
Did you feel that way when you were in college? Or do you feel that way now? I thought that way when I was in school, but it wasn’t until I went back for my second degree that the idea was solidified.
You see, if you go back for a second bachelor’s degree, you only need to take the classes that are required for your new major (and any of their prerequisites). That’s because you obtained that “well-rounded education” by getting your first degree. My question is, shouldn’t we have gotten that well-rounded education in high school?
I feel it’s very safe to say that unless you plan on graduating from an Ivy League school (and maybe even then), consider spending your first two years at a community college or an in-state public college. Then transfer to the more expensive school.
The tuition of a community college or an in-state college is much cheaper than out-of-state or private institutions and I’m sure the quality of education isn’t that different. Even if it is, it is only going to matter when it comes to classes that are applicable to your major. You probably aren’t going to put a ton of effort into your art history class either way when you are going for a degree in business or engineering. (I loved art history by the way.)
Get the basic “core” classes out of the way, then transfer to a 4-year school (public or private) and focus on your major. FYI, your degree will have your graduating schools name on it so no one will know your first two years were at a “lesser” school.
And as for the for-profit group of schools.
I went to a for-profit college for about two trimesters. It made up the bulk of my student loans. I had a lot of fun focusing on photography, but like my friends mentioned above, found it was not for me and decided to veer more toward journalism at a state school.
Thank God. I don’t know how much I would have ended up in debt if I hadn’t. For-profit schools are not cheap, hence the for-profit name. I can’t think of a good reason to attend one of these schools. Maybe if you want to be a chef? I’m sure there’s some reason, right?
Bottom line is: be careful with these kinds of schools. If they come with an 800 number and a catchy jingle, they’re probably just trying to get your money.
But the Salary IS Higher if You have a College Degree
I’ve already proved this one back in the introduction to this post, so I won’t go back over the numbers. Your salary potential is higher if you have a college degree, and higher still if you have an advanced degree. For most people.
The key to any salary statistic is to remember that after college, you are in charge of your career. You can get a great entry-level job and become complacent, making very little. Or you can work hard, continue learning, grow your career, and make a ton.
Remember that guy I mentioned before who became an auto mechanic? He works hard to be at the top of his profession. He seeks out certifications and looks for ways to become more efficient. Because of that, he now makes about two times that $5,152/month BLS statistic for those holding a bachelor’s degree. Food for thought?
Is Traditional College the Best Choice?
It depends. The answer is definitely not an absolute, overarching yes.
Take a good look at yourself or your child and ask yourself if a traditional four-year college is the best choice. Be brutally honest.
Will an apprenticeship be better? Will a trade school get you into a career quicker without having to pay to learn who Charlemagne is? Or does your desired career actually require a four-year degree? And in that case, can you finagle a cheaper tuition for part of your education?
Keep in mind too, a college education doesn’t have to happen in four years or right after high school. A good friend of mine worked his way through college in six years. He graduated without any loans and ended up with a good amount of applicable working experience.
Guess who a company would rather hire: someone with an education and experience or someone with only an education?