Higher Education Pros/Cons

[Valthazar]

Edit:  Please see the post at the bottom of this page.  This is a very inaccurate model, but only intended to start a discussion on the merit of college for a specific segment of students.



The return on investment in a 4-year degree has often been associated with earning, "nearly an estimated one million dollars more [than high school graduates]." over a lifetime.  Source This figure includes super-income individuals, such as guys graduating from Standford or NYU Stern Business School who earn multi-million dollars a year.

If you view college like an investment, it's actually not a very good one.  Two different scenarios below:

Person 1
Guy with no college, starting salary of $16,000 after taxes, and lifetime income peak of $30,000 at the peak of his career.  Every month he saves 5% of his income, and puts it into his retirement fund.

Let's assume this person in any one of the following jobs:  real estate broker, air traffic controller, dental hygienist, online web developer, medical secretary, paralegal assistant, secretary, insurance sales rep, hair stylist, optician, commercial pilot (requires limited flight school), teacher's aide, radiation therapist, respiratory therapist, nurses aide, electrician, police officer, etc. 

Person 2
Guy goes to college.  He and his family spend $34,000 on tuition and fees after graduating (not including room and board, since living expenses are necessary whether in school or not).  However, his parents are able to help out, and when when he graduates, he only has $17,500 in student loans at a 5% interest rate.

Let's assume Person 2 starts out with salary of $24,000 after taxes, and a lifetime peak salary of $56,000 after taxes.  He also saves 5% of his monthly income and puts it into a portfolio (the same retirement fund as Person 1). 

Accounting for the fact that it will take about 10-12 years to repay the debt first, Person 1 will have over $1,000,000 by age 65 at such a savings rate, while Person 2 (the college graduate), will have about $400,000.  If you guys want the math, I can provide it, but it is essentially compounding interest.

This is the type of stuff they don't teach in high school, and that they should, and I'm sure if more people were aware, they would not go to college.

[Kythia]

Your maths is definitely wrong. Earning thirty thousand a year for fifty years only gives one and a half million, there's no way on earth they can have a million in savings. Could you show the numbers you used.

[Kythia]

Not to mention you've utterly ignored inflation at, what, three per cent

[Torch]

Without seeing your calculations, I can see you have assumed that Person B does not make any contributions to a retirement fund until after their student loan debt is retired.

If Person B made their retirement contributions starting after graduation at age 22 and paid off their loans in the time frame you suggested, the numbers you dictated would be vastly different.

Also, while these are standard investment calculations, you and I (and everyone else) reading this thread knows that real life behavior will not reflect those returns. I can't fathom an 18 year old with an after tax income of $16,000 (barely above poverty level) who has the wherewithal, insight and fiscal responsibility to invest $80 per month into a retirement fund. The real-life incidence of that occurring is probably zero.

There are adults with families (many of them on this board) who cannot invest $80 per month into a retirement fund.

[Valthazar]

Sorry, I left out a very important aspect.  It is given that Person 1 has a family contribution of $16,500 for his schooling (which is what allows him to only have $17000 in loans).  As a result, I am being fair, and assuming that Person 1 also has an equivalent sum as principal for his portfolio at age 18.  If I don't include that, this analysis would be skewed from the start in favor of Person 2.  Is this an unrealistic family contribution in this economy?  Perhaps it is, and feel free to set a realistic bar if you wish. But if you criticize this analysis because I am not assuming that Person 1 has $0 to start, then you should also assume Person 2 has $34,000 in loans.  My apologies for this confusion.

I did factor in inflation.  I assume a steady growth rate of 7% (obviously not ideal), but given that any fluctuations in the market would impact both individuals equally, it is a moot point in this comparison between scenarios, and would correspondingly affect the values of both their portfolios.  Also, 5% of his after-tax income is on target with the nation's current average savings rate.

I did assume that Person 2 does not make contributions to the retirement fund until after their student loans were paid.  While I am aware of the advantages of contributing to an employer-matched retirement plan during repayment, I am not a financial aid expert, so I do not know the pros/cons of saving for retirement during repayment, versus the accruing interest on the student loans as a result of lower payments.  In addition, if you are criticizing Person 1 for lacking fiscal responsibility, what makes you think that Person 2 would have the fiscal responsibility to contribute to retirement on top of paying loans? 

There are so many factors involved that benefit both sides.  For example, if someone in a trade starts working full-time at age 20, they will be able to contribute to an employer-matched plan sooner than the college graduate.  We can make this calculation as complex as we'd like, but there are several legitimate factors involved that benefit both Person 1 and Person 2.

As far as having a family and children, I think it is almost assumed nowadays that both parents will be working.  The days of stay-at-home parents are pretty much over due to cultural factors and economic factors, so a two-income household will certainly be needed.

edit:  Person 1 is Person A and Person 2 is Person B.... sorry gets confusing, I tried to edit my post with corrections.

[Pumpkin Seeds]

The problem is that you are calculating success in this game by how much is set into a retirement account.  This favors the highschool graduate simply because this person is able to, on paper, save over a longer period of time.  Investment wise the long run makes more money at the end.  The student is certainly starting out at disadvantage because the student is not making retirement investments during loan repayments in this model and is also not making those payments during school.  This model does fail to recognize that most companies hiring entry level college graduates automatically put money into a 401k as a benefits package and do tend to match the contribution (such as mine does).

Also the model does not take into account a realistic ability of someone on 16,000 dollars a year to make a 5% contribution of their money to investment.  While 5% doesn’t sound like much, coming out to about 30 dollars a biweekly paycheck, when dollars matter that is quite a bit of money to lose per paycheck.  A person with a college degree making a larger paycheck and making regular loan payments will also have more purchasing power along with a higher credit score.  This should translate into a mortgage, adding a house into their assets at the end.  This would then lend toward reverse mortgages and such for retirement. 

There is also a failure to factor in job stability.  While the recession has left a bad taste in people’s mouths about the stability of a college degree, by and large highschool diploma holders have higher job turn over.  Also the highschool diploma holder tends to work in more physically demanding jobs that will have higher injuries and require more sick time.  A college degree holder will likely have some sort of sick leave and vacation time to use, the highschool diploma holder will not.  Unemployment, missed work time and so on will more adversely affect the highschool diploma holder than the one with a college degree.

This equation fails to account for quite a few variables that have lasting and profound effects on the end result.

[Torch]

VE, the only thing you have illustrated with these examples is the beauty of compounding interest. That's it.

Interest compounded over 47 years (from age 18 to 65) will most certainly yield a greater return on investment than interest compounded over 32 years (from age 33 to age 65). Whether one is a college graduate, a high school graduate or a beauty school dropout is irrelevant. It's basic math. *shrug*

These examples in no way shape or form address the intrinsic value of a college education.

[Valthazar]

Look, take my advice for what it is worth.  This is not suggesting that college is worthless - far from it actually!  But I'm simply saying, that if I'm chatting with someone who is struggling in this economy, and he or she has a kid who is an average student, I would suggest to them to pursue a non-college training process, rather than jump into college as a ticket for the American Dream.

There is also a failure to factor in job stability.  While the recession has left a bad taste in people’s mouths about the stability of a college degree, by and large highschool diploma holders have higher job turn over.

As I mentioned in my original post, I am not referring to simple high school diploma holders, I am referring to skilled professionals of non-college training (usually the result of a 1-2 year certificate programs).  I indicated these careers under Person 1's category in my initial post.  Due to this being less rigorous than a 4-year school, usually students are able to pay for these certificate programs entirely out of pocket working a couple of part-time jobs.

I will be the first to agree that there is an intrinsic academic and spiritual value associated with college education.  However, most students in this economy are enrolling in college because they feel it will elevate their future economic potentials.  In other words, money is a huge factor in going to college.  No longer are people going to college purely for "intellectual development."  In all honesty, the intelligent discussions on this sub-forum provide far more interaction on meaningful issues than the interaction in your average college classroom.  Information about the world is easily accessible through a litany of online materials, video lectures, TED talks, etc. 

Also the model does not take into account a realistic ability of someone on 16,000 dollars a year to make a 5% contribution of their money to investment.... This model does fail to recognize that most companies hiring entry level college graduates automatically put money into a 401k as a benefits package and do tend to match the contribution (such as mine does).

I placed $16,000 as a very modest starting salary for anyone in one of the non-college career paths I mentioned in my original post.  This means, that at age 20, or 21, this is the income they would receive, slowly rising over their lifetime to a peak of $30,000 (which itself is quite modest for a couple of those professions).  Given that a college student is living in a dorm, and eating meal plans that is largely paid for either through their family savings, or through loans, is it unrealistic to suggest that a 21 year old may choose to live with his family while he earns $16,000 a year, and starts off his life?

As far as employer-matched contributions, this is not exclusive to white-collar college-level positions.  Most of the professions I have listed, especially those that involve large-scale businesses offer employer-matched contributions - and likely, the individual will be able to start contributing at an earlier age, as compared to his college educated counterpart.  But again, this gets really complicated, and without a concrete situation, I don't feel comfortable using this as a primary justification for this perspective.  My only point is that it is not exclusive to college-level jobs.

I can't tell you how many people I have chatted with, who cannot even qualify for a house mortgage because of their loans, so I am not sure what evidence you have that suggests college graduates are more likely to be home owners in this decade.  Most of the research I have done shows that college education seems to be adversely affecting the housing market.

http://finance.yahoo.com/news/student-loans-keep-buying-home-060138508.html

What evidence do you have that suggests college graduates who took out loans have a higher credit score, versus someone who has responsibly built credit during those same 4 years?  For example, utilizing a credit card like a debit card, without interest payments.

[Pumpkin Seeds]

Average cost of cosmetologist school – 10-20k
Average cost for air traffic controller – 10-35k
Average cost for medical secretary – 25k
Average cost for dental hygienist – 25 to 70k depending on level of education achieved
Average cost for paralegal – 14k not including pre-requisite hours.
Median loan debt for respiratory therapist – 17k
Average cost for a bachelor degree – 6-48k
Average loan debt for college graduate – 26k

I think you are mistaken about your assumption of less rigorous and cost with your first model.  These numbers also do not include cost of living.

The average starting salary for a college graduate is 44k.

I am basing an assumption of their credit score being higher due to a higher income bracket matched with, your stipulation, that they are making regular and adequate loan payments.  Once the loan is paid off their credit score would be sufficient, their debt to income ration should be sufficient and their income sufficient to purchase a home better than the person making less.  Also your article is pointing out the taking of a mortgage while a student loan is present, not afterward.  Certainly taking out a massive loan while having another large loan out is difficult.

At this point there are quite a few holes poked already in the instance given to show its incomplete nature and detachment from any semblance of reality. 

[Kythia]

I did factor in inflation.  I assume a steady growth rate of 7% (obviously not ideal), but given that any fluctuations in the market would impact both individuals equally, it is a moot point in this comparison between scenarios, and would correspondingly affect the values of both their portfolios.  Also, 5% of his after-tax income is on target with the nation's current average savings rate.

This is patently untrue, Valthazar.  Your entire argument is predicated on Person B beginning his savings 16 years later.  Thus, obviously, missing out on 16 years worth of inflationary decrease on his savings.

[Valthazar]

Could you please link me to where you are getting these prices?  I started this discussion with the assumption that both Person 1 and 2  would receive $16500 family contribution.

Also, where can one get a bachelor's for $6000?

Taking out loans for college are usually on a 10-15 year repayment, and given the age at which most people have kids, it creates big problems for couples and newlyweds.

[Kythia]

Actually I still remain unconvinced by your maths even adding in your later addition about the starting lump sum.  Gimme ten minutes to put a spreadsheet together and check.  I'll use your growth rate of 7% and inflation at 3% (now we've presumably agreed it was missing from your analysis)

[Valthazar]

Inflation was not missing, and I am confused why you are fixated on inflation, considering that both portfolios and individuals will be negatively affected equally,, regardless of the rate.  The purpose was to consider two individuals facing equal economic realities.

I think Torch understood that this is more of a compounding interest comparison rather than an attempt to forecast a single individuals' portfolio in 40 years.

[Kythia]

Read my comment Valthazar.  I quote for your convenience:

This is patently untrue, Valthazar.  Your entire argument is predicated on Person B beginning his savings 16 years later.  Thus, obviously, missing out on 16 years worth of inflationary decrease on his savings.

[Ebb]

This is an interesting debate to have, but if you're going to talk about the lifetime value of a typical college education then there are models which are far more rigorous and based on real data, rather than just arbitrary numbers. Here's one done in 2012 by the Pew Research Center, which tends to be pretty highly regarded as a research institution:

http://www.pewsocialtrends.org/2011/05/15/is-college-worth-it/

And a direct link to Chapter 5 of the study, which is most relevant to the current discussion:

http://www.pewsocialtrends.org/2011/05/15/is-college-worth-it/6/#chapter-5-the-monetary-value-of-a-college-education?src=prc-number

It's not exactly an open and shut case, and there are lots of individual points worth delving into. But people have spent an awful lot of money and effort to come up with detailed answers to these questions based on real-world data. You may as well start from there.


To me the value of a college education is in the flexibility that it gives you later in life to pursue other options as they arise. For a great many white-collar professions a degree is necessary to get your foot in the door, and in many cases it doesn't even particularly matter what the subject of the degree was. It is taken as a proxy in the business world for the ability to think methodically, complete projects and learn new skills. That is not to say that these qualities can't be found in non-degree holding individuals -- far from it. But it's the simple truth that not holding a degree will bar you from consideration from a wide number of opportunities. Although it is certainly possible to attain a degree later in life, it is generally considered easiest to achieve this goal when you're young, due to a general lack of hindering responsibilities (mortgage, kids, etc.) and an assumption of parental support that might not be present later in life. Again, these are generalities and obviously do not apply to every single individual.

[Kythia]

Awesome, saves me a job.  Thanks Ebb, nice find.

[Valthazar]

Read my comment Valthazar.  I quote for your convenience:

I read your comment.  The inflation rate would also correspondingly reduce amount owed on debt and interest.  Which is why I'm not making a big deal of inflation, since it benefits and hurts the borrower.

[Kythia]

I read your comment.  The inflation rate would also correspondingly reduce amount owed on debt and interest.  Which is why I'm not making a big deal of inflation, since it benefits and hurts the borrower.

Yes, but you haven't factored that into your analysis have you.  Person B's finances start being relevant once their debt is paid off, according to your analysis.  You've handwaved over the details of their debt, and focused entirely on their saving for a retirement fund.  That handwave has the effect of removing the effect of inflation on them for the first 16 years of your analysis.

Look at it again.

Edit:  Long story short, could you please provide the math I asked for before and you offered in your first post.

[Valthazar]

Show me what your findings are then, because unfortunately, I'm not at the computer right now.  I'll provide a more detailed explanation later.

[dragonsen]

The return on investment in a 4-year degree has often been associated with earning, "nearly an estimated one million dollars more [than high school graduates]." over a lifetime.  Source This figure includes super-income individuals, such as guys graduating from Standford or NYU Stern Business School who earn multi-million dollars a year.

If you view college like an investment, it's actually not a very good one.  Two different scenarios below:

Person 1
Guy with no college, starting salary of $16,000 after taxes, and lifetime income peak of $30,000 at the peak of his career.  Every month he saves 5% of his income, and puts it into his retirement fund.

Let's assume this person in any one of the following jobs:  real estate broker, air traffic controller, dental hygienist, online web developer, medical secretary, paralegal assistant, secretary, insurance sales rep, hair stylist, optician, commercial pilot (requires limited flight school), teacher's aide, radiation therapist, respiratory therapist, nurses aide, electrician, police officer, etc. 

Person 2
Guy goes to college.  He and his family spend $34,000 on tuition and fees after graduating (not including room and board, since living expenses are necessary whether in school or not).  However, his parents are able to help out, and when when he graduates, he only has $17,500 in student loans at a 5% interest rate.

Let's assume Person 2 starts out with salary of $24,000 after taxes, and a lifetime peak salary of $56,000 after taxes.  He also saves 5% of his monthly income and puts it into a portfolio (the same retirement fund as Person 1). 

I'm going to have to disagree with your lifetime peak salary amount for a college graduate (Person 2/B). I am a Certified Managerial Accountant, accredited by the Institute of Managerial Accountants. They perform an annual survey to determine average salary for their members. The average salary for five years from 2007 to 2011 has always been just over $100,000. 99% of all those polled had a bachelor's degree at least. Average age floats around 48 to 50. For a young person starting out, yes, a trade profession may get you more money for that first job. The problem is the salary peaks well below what a college degree can get you. Another problem with most trade professions is health related. Eye sight starts to fail. Joints start to stiffen up. Those are just two small problems that can seriously affect a trade profession as you age.

By the way, I was able to get my Bachelor's in Accounting at Idaho State University and I only incurred $8,000 in total student loans. My wife just got her Bachelors as well, a Psych degree, and only incurred $6,000 in debt. We were able to secure some grants and scholarships to help offset costs.

[Pumpkin Seeds]

I pulled the numbers from a few different sources since well..they covered different schools.  The college portion comes from this website which I did get wrong because the average is around 8k, sorry.  http://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2012-13

[Kythia]

Ebb's source confirms your 6K though, Pumpkin

[Valthazar]

Everyone here is making excellent points, and I myself am a proponent of college for students who have the smarts and work ethic to graduate college, and the work ethic to pursue internships, job opportunities, etc.  My arguments above were more for the average student who is just "gliding" by going to college, because it is "expected."

A strong student, capable of finding full time employment and responsible with their repayment plan, should have no problems with going to college.  In fact, like many of you are saying, it is a beneficial endeavor.  I am not trying to suggest that college is a bad decision - only that qualified individuals should attend college. 

To prove this side of my view, that college can be beneficial, and to show the merit in many of your perspectives, I modified my method to take into account the idealistic scenarios people here are posting, such as immediate full-time job post-graduation, stable employment for the first 10-years following college, and being able to contribute to both retirement and student loans simultaneously.  I even took into account the savings issue for Person B, and assumed no late fees.  I also included Kythia's suggestion of looking at the influence of inflation rates on salary growth, debt burden, and investments.  I took a bit of an unconventional approach to this (because this is not my field), and came up with some values.  I would appreciate a healthy discussion about this.

For the sake of fair play, I assumed both had an equal 40 year time period of working full-time - which is probably unlikely, but again, for an "ideal" scenario for a college student, I figured this would be worth doing.

Details about Person B's student loan:

$17,500 borrowed at 6.8% interest rate.
Repayment plan: 120 months at a payment of $201.39 for a total of $24,166.87

Because we are purely talking about earnings here, and the buying power of said earnings, I decided to convert all dollar values in this discussion into "today's dollars."  In other words, if I say the person has $100 in 2053, that has the same buying power as $100 today.

So what I did was calculate the pay grade increase for Person A, and Person B.  I assumed both would be working 40 years. The pay scales were 16,000 - 30,000 and 24,000 - 56000, respectively.  So what I did, was take the difference of each range, and divide by the number of years working.  So in other words, 14,000 divided by 40 = $350 assumed salary rise per year towards the peak salary.  At the same time, 32,000 divided by 40 = $800.  I then multiplied each of these derived values by 0.97 to get the "today's dollar" value of each year's pay raise, factoring in a 3% inflation rate.  Each year, 3% was essentially 'removed' from the previous year's pay bump, due to less buying power.  Obvious real life isn't this idealistic, but it is a model that starts at a starting salary towards a peak salary.  Utilizing these figures, I calculated salary per year over their 40 year work span.

I assumed that Person A was investing 5% of their yearly salary (which has already accounted for inflation).  For Person B, I took people's perspectives here into consideration, and said he/she invested 1% of their yearly salary for the first 10 years working (due to making student loan payments).  The student loan payments were decreased by 3% for each year of the 10 year repayment, since inflation was decreasing its value.  After the 10 years, Person B also continued to invest 5% of their yearly salary, just like Person A.

My calculations yielded a "today's value" of $138,834.8345 for Person B and $125,698.2272 for Person A which shows that college is absolutely a great investment if you have the smarts, and are fortune to have stable employment afterwards.  I need to go for now, but when I get time this evening, I'll try to run the opposite set of numbers for differential work spans, potential spurts of unemployment, and effects of late fees on loans.

Also, I had a stock market growth rate of 7% along with buying power depreciation of 3% for  net growth of 4%.

I have an Excel spreadsheet, but obviously I can't post it here.  Great discussion so far.

[Ebb]

It seems that you're putting a lot of effort into fine-tuning a model that ultimately is only going to be as good as the data that you plug into it. The computation of compounded interest in a retirement account over time is a mechanical procedure that's pretty much straightforward. If you want a comparison between your two cases that sheds light on the main question, then you need to have data about those two cases derived from the real world. Your initial assumptions of salary range for your college-goer and your non-college-goer are critical, but as far as I can tell (and I might have missed something) these are numbers that you just made up out of thin air.

Here's one chart from the Pew research report that I linked to earlier:



The average values shown here aren't even close to the ones you're using in your model. Moreover, just by eyeballing it, it doesn't look to me like your assumption of a linear growth in salary over time is accurate.

There's nothing wrong at all with putting together a model in order to better understand a phenomenon and to draw judgment about it. It just seems to me that you're focusing on the wrong bits here.

For what it's worth, I agree with a great deal of your initial premise. For example, it can clearly be shown that the person who attends college for a number of years but who doesn't graduate ends up much further behind financially then either the person who graduates or the person who doesn't attend in the first place. I think it's very true that there is a population of people who would be better served by taking a route other than a traditional four-year college, and I would also agree that some proportion of that group is being "pushed" into college by a societal expectation. But all of this touches only tangentially on what you're getting at with your model, so I don't think it ends up shedding much light on the conversation. For that you'd want to look at graduation rates, cost/benefit analysis of trade schools and certification programs, and probably a host of other factors.

[Valthazar]

Ebb, thanks for the feedback. 

I realize this hypothetical model is far from accurate, but I was hoping to get a discussion going on ways we can measure the "quality of the product" of college - since so many people define the ultimate purpose and value of a college education differently.  I absolutely agree that for people willing to work hard in their studies, and looking for opportunities, college is a great investment.  However, my original post was attempting to highlight how there are different "academic groups" among college graduates themselves.  Obviously there are many, as I'm sure many of us are - who worked hard in college, and see its value.  However, like you said, there is a prominent segment of C average students who are simply cruising their way through college.  I still am not sure how to "define" this segment of students, and it is difficult to find post-graduation data on how this segment performs.  I have seen the graph you posted in other forms in the past, but because that represented the average income for all college graduates, regardless of grades or approach, I didn't want to use that data.  If I had data on the average income for that particular segment of students, I would have used that, but I decided to take a very modest estimate (which obviously makes that model very un-scientific).

I think both of us largely feel the same way about this.  What I'm going to describe here will be purely anecdotal, pertaining to one perspective, but I think it will add some insight into this issue.  At a particular institution - and from what I have heard tends to happen at many institutions - is that quite a large number of freshman students majoring in the very objective "hard" sciences (such as engineering, chemistry, biology, mathematics, economics, etc.) tend to do extremely poorly, and many of them get frustrated, and end up switching their major to stereotypically "easier" subjects (such as humanities or the liberal arts).  I am not at all suggesting that these fields are any lesser - only that they do not have a definitive right and wrong answer, and are much more subjective disciplines.  Because the administration is hyper-conscious about freshmen retention rates, I am aware that there is a lot of pressure on certain faculty to "somehow" get these students to pass.  Basically, these students had a poor work ethic, and flunked out of the more objective fields.  But now, they are continuing their poor work ethic, and yet, somehow sliding from one course to another with C/C+ grades... somehow.  To be honest, I think it should be seen as a violation of teaching ethics to artificially give a student a barely passing grade, when they have not earned it, simply due to administrative pressure.  But I suspect this is the hidden reality in many institutions of higher education.  Ultimately, it ends up hurting the students who are producing quality work, because it slowly and steadily de-values that effort.

It is this segment of students that I am speaking about.  While I certainly agree based on that graph that the starting salary of a B.S. or B.A. holder is $42,000, I am quite confident that these particular students will be on the lower end of that average (just like I am quite confident that the go-getters will be on the on the higher end of that average, if that is what they so desire).  Because right now, what's happening is that academic counselors and guidance counselors are showing that exact same graph to high school seniors, and giving some false hopes to students who may not be so academically inclined.

[Oniya]

Sooo... I invoked the power of Google (actually GoodSearch), chanting the incantation 'earnings of college graduates by GPA'.  I've learned that when it comes to statistical analyses, there's a high probability that someone, somewhere, has decided to see if the numbers make a pretty picture.  The journal article from the Journal of Human Resources is noticeably scant on pretty pictures, but does present a substantial amount of data in chart form.

I leave it to more critical minds to interpret the charts, but I noted one particular sentence near the bottom of page 13 of the PDF (p. 264 of the actual journal):

The positive and significant grades/earnings relationship for the first job after graduation indicates differing levels of human capital accumulated in college.

[Denivar]

Accounting for the fact that it will take about 10-12 years to repay the debt first, Person 1 will have over $1,000,000 by age 65 at such a savings rate, while Person 2 (the college graduate), will have about $400,000.  If you guys want the math, I can provide it, but it is essentially compounding interest.

This is the type of stuff they don't teach in high school, and that they should, and I'm sure if more people were aware, they would not go to college.

If one's only criteria when making the decision of whether to go to college or not is to have more money in one's retirement account at age 65, then shouldn't one assume the same living expenses along the way?

Apparently the fellow who didn't go to college lives off $30k - 0.05% = $28.5k at the 'peak of his career'. So shouldn't the college grad making $56k be able to survive off the same $28.5k and thus save $27.5k per year -- almost half her salary?

[Valthazar]

You're right Denivar, it's a very poor model when looking at the net total of college graduates - but again, this model was attempting to get a discussion going on a specific segment of college graduates.  I have explained my reasoning in the post below.  Clearly, as you suggest, if one is industrious and makes use of the opportunities in college, it is a great investment.

https://elliquiy.com/forums/index.php?topic=187889.msg9073409#msg9073409

This model is very unscientific, because it is not based on actual data, as well as the fact that I made a lot of errors in putting it together.

[Bloodied Porcelain]

I'm also going to throw this out there... There are a ton of employers (and honestly almost every employer I've ever had, even when I was working minimum wage) here in the US who are willing to reimburse you for your college tuition provided you A: work a set number of months/years/whatever after they do so (you only have to pay them back if YOU leave, you don't have to pay anything if you get laid off due to downsizing or something of that nature) and B: Get a decent grade in the class. The company I'm with right now is willing to reimburse me for not only my technical certifications, but my four and six year degrees (I haven't decided just how high I want to go yet, so I'm only planning for a bachelors). Between them paying me back for my out of pocket expenses and my pell grant, I will graduate with only a few thousand in debt and I'll have cemented my position with my company (not to mention my value in the workforce as a whole). Most companies have entry level positions that pay a semi decent wage (I'm making about 35k a year at the moment) and are willing to help you get through school which greatly negates the cost to you and makes you more valuable as an employee. They're investing in you, so they're less likely to look at laying off/firing you down the line.

It really bothers me when people say college isn't worth it and "too many people" are going. I agree that the quality of our college educations these days is greatly diminished, but I think that's more because of an over all "dumbing down" of society as a whole. Look at kids in highschool... few of them understand half the words their trying to use, let alone are able to spell them. And basic math? Forget about it! But is a degree useless? Not at all, if you get the right degree! Going out and getting a liberal arts degree or a writing degree with nothing to pad it (I'm getting a technical degree and a writing degree because I plan to pursue my current career path as a technical writer) is pretty much shooting yourself in the foot, but a degree in science? Technology? Teaching? Those aren't useless (though teaching pays squat, which is why I tell anyone who asks me if they should go in to teaching not to do it unless it's a passion), and there's a world of jobs out there (yes, even with the economy and job market being what they are) for people qualified to get them.

I work as a contractor for the DoD and I see dozens of positions that require a degree posted every day, and almost none for those without degrees or only with trade skills/certifications. Most people need both a degree and a number of certifications.

Is any of this to imply that everyone should have a degree? No, of course not, but it's been pretty solidly proven that the more accessable higher education is in a society, the better the society does as a whole. I think the biggest issue with our current system of higher education is the fact that it's all privatized. Those running the schools are more interested in making money than truly educating. Their sports programs garner more interest than their research labs. Their fraternities/sororities garner more attention than half their educational departments. They overprice everything (IE I can go to the community college here and take a basic prerequisite math class for about 600 bucks including books, but if I were to go ten miles down the street to the private college and take the exact same level mathematics course with the same book and close to the same work load, it costs 50-100% more, which is absurd).

Even if you make higher education a free pursuit that anyone can get in to, there are still going to be plenty of people who either A: don't go because they can't handle it, or B: can't graduate. You get the education system out of private funds and raise the requirements to get in/graduate. Then you have a highly educated graduate class and society, and you're not risking leaving someone out in the cold and unable to improve their quality of life because those improvements cost too much.

[Valthazar]

I agree with everything you've said, and you seem like a very motivated, hard-working person.  I am not referring to people in your position.

My point is, why not make loans merit-based, like they used to be?  In other words, a world where banks were actually taking a 'gamble' by giving out the loan, and thus, would only give loans to students that they knew had the academic ability to graduate, and eventually be able to pay them back.  I have not had the pleasure of chatting with you yet, but given what you have described so far in your post regarding your job/career, I am willing to bet that you were at least a reasonably decent student in high school - and I'm sure you would have qualified for a merit-based loan, had you decided to pursue college after high school.  I apologize if this is an incorrect assumption.

What is happening now, with freely providing loan money to a 1.5 GPA high school graduate to go to XYZ University of Profit, is that banks no longer have a risk factor in lending money.  This student will most likely dropout of college, or barely graduate.  The banks can rest on their laurels since they know they can garnish this student's wages, social security checks, etc. etc.  In other words, it's just another form of predatory lending.

This is an injustice for this segment of students.  This is no different from the 2008 sub-prime mortgage crisis, where people were granted housing mortgages that did not correspond to buyers' incomes.  In many ways, the current student loan issue represents a safer scenario for the banks, since student loans cannot be dissolved in bankruptcy, unlike housing mortgages.

Many economists state that the student loan market will be the next financial bubble to burst.

There are many campaigns now where students describe being deceived by financial aid officers, and being approved for loans, despite the lenders being fully aware that it will be impossible for them to pay it off.
http://studentdebtcrisis.org/outwithstudentdebt/

Everything you say is true (including the fact that many jobs today are present that require college degrees).  The solution, however, is not to simply flood higher education with more students.  The solution is to improve the K-12 education system, which will naturally result in more entrants to college.

A lot of people in this thread are presenting very idealistic solutions - such as removing private colleges/universities.  How exactly are you planning to convert a private industry (or at the very least, any private industry) into a government-run industry, without changing the basic premise of our financial system?  The better question is, is this even realistic? (Given that most Americans enjoy having the freedom of private choice).

[Bloodied Porcelain]

You'd be wrong to assume I was a decent student. I could have been (if my college career is any sign, I could have been a straight A student), but I wasn't. I'm not even sure what my GPA was, I hardly ever bothered to show up after 10th grade. I did take the major tests (SAT, ASVAB, etc) because it meant getting out of classes for a legit reason, but I hardly ever bothered to go to my classes. I did score really high on all my tests, though. I held the highest female score in my state (beat the score my mom set when she was in high school) on the ASVAB for several years. I ended up dropping out and didn't get my high school diploma until I was 20 because I went and tested out of the last two credits I needed to graduate. It wasn't until a couple years ago that my family came to accept that I wasn't "just lazy" in school. I had undiagnosed ADD, I was bipolar, and honestly knew more of the material than most of my teachers. I was bored and unmotivated and put myself through a vicious cycle of not being able to focus, taking that as meaning I was too stupid to "get it" and didn't see the point in trying if I wasn't smart enough to do the work. I had everyone telling me I was just a "bad kid" even though I'd never done anything honestly terrible. I'm really lucky none of my attempts to take my own life out of despair at what was going on worked.

It took growing up and making it on my own on minimum wage, getting out of my parents house at 17, etc for my family to realize that they'd been ignoring serious issues when I was in their care for years. I'm not medicated for ADD now and I'm obviously still bipolar, but now that I'm aware there is a problem and that it's not me, I can cope and I'm working through it.

I will agree with you though, that the student loan situation is insane, which is why I think we need to do-away with for-profit education in our country. It doesn't do anything but hurt us. It gives the banks an easy way to basically steal from people who don't understand exactly what it's going to take to get to where they need to be to pay it off, never mind if the person isn't able to finish school because of some kind of life crisis or whatever. It also means that those who chose to go to less expensive colleges aren't taken as seriously as those who do go to "big" schools, even if their education might have been just as good... the name on your diploma means a lot to employers (this coming from someone who works regularly with a technical recruiter for the company that employs me).

And I agree that K-12 needs to be improved dramatically (I have my son in private school because the public schools here are lack luster at best), but I don't think that taking colleges out of the for-profit sector will automatically "flood them" with more students. I think in the offset you'll see a sharp increase, yes, but I also think over all you'll see that people will stop being drawn in by things like advertisements making false promises about what life is going to be like for students and professionals with degrees, you'll have more people basing whether or not they can get the degree on their own merit and not on finances, etc.

[Valthazar]

I'm glad you were able to sort out those issues from your high school years, and develop a great career. 

But try to put yourself in that position today, where all your classmates and teachers were referring to you as the "bad kid" - and yet, a university, of all things, is welcoming you with open doors - and I'm talking about non-profit private universities and state schools.  Even state schools, while receiving federal subsidies, maintain largely autonomous tuition-based budgets, which make them have to segment their market base.  They also run advertising campaigns, and struggling high school students are a strong target for them.  Given that his/her parents usually don't have much education, the student doesn't have much perspective to go off of. 

All their life, they've been sold a message that college = American middle class, so they decide to enroll, and have to do the learning process you describe, while they are in college - which will certainly affect their grades.

Whereas if there was a merit-based loan program, perhaps they would have been denied initially, but a few years down the line, may qualify - mirroring your path to success.

[Chris Brady]

The biggest issue I found with schooling in general and the work market is that what you know meant very little.  It was who you knew that would get you the job, what you knew might have been able to let you keep it, but in a lot of industries, especially government, it often didn't.

[dragonsen]

I'm also going to throw this out there... There are a ton of employers (and honestly almost every employer I've ever had, even when I was working minimum wage) here in the US who are willing to reimburse you for your college tuition provided you A: work a set number of months/years/whatever after they do so (you only have to pay them back if YOU leave, you don't have to pay anything if you get laid off due to downsizing or something of that nature) and B: Get a decent grade in the class. The company I'm with right now is willing to reimburse me for not only my technical certifications, but my four and six year degrees (I haven't decided just how high I want to go yet, so I'm only planning for a bachelors). Between them paying me back for my out of pocket expenses and my pell grant, I will graduate with only a few thousand in debt and I'll have cemented my position with my company (not to mention my value in the workforce as a whole). Most companies have entry level positions that pay a semi decent wage (I'm making about 35k a year at the moment) and are willing to help you get through school which greatly negates the cost to you and makes you more valuable as an employee. They're investing in you, so they're less likely to look at laying off/firing you down the line.

It really bothers me when people say college isn't worth it and "too many people" are going. I agree that the quality of our college educations these days is greatly diminished, but I think that's more because of an over all "dumbing down" of society as a whole. Look at kids in highschool... few of them understand half the words their they're trying to use, let alone are able to spell them. And basic math? Forget about it! But is a degree useless? Not at all, if you get the right degree! Going out and getting a liberal arts degree or a writing degree with nothing to pad it (I'm getting a technical degree and a writing degree because I plan to pursue my current career path as a technical writer) is pretty much shooting yourself in the foot, but a degree in science? Technology? Teaching? Those aren't useless (though teaching pays squat, which is why I tell anyone who asks me if they should go in to teaching not to do it unless it's a passion), and there's a world of jobs out there (yes, even with the economy and job market being what they are) for people qualified to get them.

I work as a contractor for the DoD and I see dozens of positions that require a degree posted every day, and almost none for those without degrees or only with trade skills/certifications. Most people need both a degree and a number of certifications.

Is any of this to imply that everyone should have a degree? No, of course not, but it's been pretty solidly proven that the more accessable accessible higher education is in a society, the better the society does as a whole. I think the biggest issue with our current system of higher education is the fact that it's all privatized. Those running the schools are more interested in making money than truly educating. Their sports programs garner more interest than their research labs. Their fraternities/sororities garner more attention than half their educational departments. They overprice everything (IE I can go to the community college here and take a basic prerequisite math class for about 600 bucks including books, but if I were to go ten miles down the street to the private college and take the exact same level mathematics course with the same book and close to the same work load, it costs 50-100% more, which is absurd).

Even if you make higher education a free pursuit that anyone can get in to, there are still going to be plenty of people who either A: don't go because they can't handle it, or B: can't graduate. You get the education system out of private funds and raise the requirements to get in/graduate. Then you have a highly educated graduate class and society, and you're not risking leaving someone out in the cold and unable to improve their quality of life because those improvements cost too much.

Just an FYI, BP. I corrected a couple of your mistakes in the first post. :) As a joke. Feel free to do the same to any of my posts.

You'd be wrong to assume I was a decent student. I could have been (if my college career is any sign, I could have been a straight A student), but I wasn't. I'm not even sure what my GPA was, I hardly ever bothered to show up after 10th grade. I did take the major tests (SAT, ASVAB, etc) because it meant getting out of classes for a legit reason, but I hardly ever bothered to go to my classes. I did score really high on all my tests, though. I held the highest female score in my state (beat the score my mom set when she was in high school) on the ASVAB for several years. I ended up dropping out and didn't get my high school diploma until I was 20 because I went and tested out of the last two credits I needed to graduate. It wasn't until a couple years ago that my family came to accept that I wasn't "just lazy" in school. I had undiagnosed ADD, I was bipolar, and honestly knew more of the material than most of my teachers. I was bored and unmotivated and put myself through a vicious cycle of not being able to focus, taking that as meaning I was too stupid to "get it" and didn't see the point in trying if I wasn't smart enough to do the work. I had everyone telling me I was just a "bad kid" even though I'd never done anything honestly terrible. I'm really lucky none of my attempts to take my own life out of despair at what was going on worked.

It took growing up and making it on my own on minimum wage, getting out of my parents house at 17, etc for my family to realize that they'd been ignoring serious issues when I was in their care for years. I'm not medicated for ADD now and I'm obviously still bipolar, but now that I'm aware there is a problem and that it's not me, I can cope and I'm working through it.

I will agree with you though, that the student loan situation is insane, which is why I think we need to do-away with for-profit education in our country. It doesn't do anything but hurt us. It gives the banks an easy way to basically steal from people who don't understand exactly what it's going to take to get to where they need to be to pay it off, never mind if the person isn't able to finish school because of some kind of life crisis or whatever. It also means that those who chose to go to less expensive colleges aren't taken as seriously as those who do go to "big" schools, even if their education might have been just as good... the name on your diploma means a lot to employers (this coming from someone who works regularly with a technical recruiter for the company that employs me).

And I agree that K-12 needs to be improved dramatically (I have my son in private school because the public schools here are lack luster at best), but I don't think that taking colleges out of the for-profit sector will automatically "flood them" with more students. I think in the offset you'll see a sharp increase, yes, but I also think over all you'll see that people will stop being drawn in by things like advertisements making false promises about what life is going to be like for students and professionals with degrees, you'll have more people basing whether or not they can get the degree on their own merit and not on finances, etc.

I agree with the dumbing down of society. I loathe standardized tests, even though I scored fairly high in the SAT and ACT. (ACT average score was 30 out of 36. I forget my SAT.) Now, they have standardized tests EVERY year starting with kindergarten. The school system doesn't care about my kids unless they score below passing which negatively affects their pass rates. Those pass rates affect teacher pay and school budgets. They don't actually show what the kids knows, only that they can regurgitate information on command. For all my complaints, I honestly cannot think of an alternative. Similar to the health care snafu, yes it is broke. Instead of just complaining about it why not give a possible solution to the mess? Simply removing standardized tests is not an answer either. Unfortunately, there does need to be a way to compare progress. We do need to compare apples with oranges, along with bananas, pineapples, pumpkins, squash, tomatoes, grapes, cherries, etc.

The problem with the athletics vs arts/sciences is funding. Many more people are willing to donate to schools for athletic programs than they are for "touchy-feely crap." Businesses are willing to buy ad spots on fields because they know that the local community, their customers, will be there for the games and see those ads. I'm not so sure that a choral recital would have the same effect if there was a big ad in the back declaring how "Big Ed" will take care of your tire needs. Few people read the programs at the art events to see who donated to make the event possible. I know I rarely do.

The biggest issue I found with schooling in general and the work market is that what you know meant very little.  It was who you knew that would get you the job, what you knew might have been able to let you keep it, but in a lot of industries, especially government, it often didn't.

Sadly, this is very true. Your personality also has a part in your job interview process, much more than your education.

[Bloodied Porcelain]

Just an FYI, BP. I corrected a couple of your mistakes in the first post. :) As a joke. Feel free to do the same to any of my posts.

D'oh! This is why I shouldn't try to write things like that off-the-top-of-my-head-while-sleepy. My brain moves faster than my fingers can keep up and I don't bother to double back to check things. -.- I feel a bit like an idiot now. LOL

[Zeitgeist]

While the statistical analysis of the argument has mostly played out, I won't attempt to argue that.

Everyone's experiences and situation is different. I consider myself very fortunate to have an almost $70K/year job and while I have a GED the highest grade I completed was 10th. I didn't know a soul at my current employer 15 years ago now. I was applying for a junior database programmer position, and having no real life experience to point in the speciality, I brought with me a disk of Microsoft Access database programs/queries/routines with me as proof positive of my abilities. I learned later they never looked at it but I was hired nevertheless.

I have been convinced over time that intelligence has less to do with capability and more to do with simple curiosity. I've learned more crap by accident than I ever did intentionally.

Again, this is and was my experience, which is to say is probably not yours or anyone elses.

[Tairis]

College is worth what you can get out of it. Which for many people isn't nearly what they put into it. The number of people I work with that have the same or lower paid position than I do that have a completely irrelevant degree is staggering.

That's the problem with statistics. Yea, having a degree across the board gives you an increase in money. Start breaking it down into majors, however, and you're going to start seeing some major disparities.

[didoanna]

I have been convinced over time that intelligence has less to do with capability and more to do with simple curiosity. I've learned more crap by accident than I ever did intentionally.

Brilliant!

[IStateYourName]

An interesting discussion.  I'm going to be a little contrarian and say that degrees do matter...but perhaps not for the reasons we believe.

I think what most determines your success and prosperity is vision, drive, focus, and the ability to translate these into adding value to the people and things around you.  What do you want to do?  No, really.  I didn't ask "what do you think you have to do just to get by?"  I asked you what moves you.  What makes you want to get up early, stay up late, have passion in life?  And can you put a little twist or curve on it so that it adds value to the world around you? 

A degree?  Yeah, that's useful.  But it's as much an effect as a cause.  If you had enough passion for something to sit through four to nine years of classrooms after the law said you no longer needed to sit in a classroom, when you already had 12 years of classrooms--if you have the drive and discipline to do that and do it well, you probably have the gumption to achieve other things as well, including financial success.  The degree is an effect of your successful personality, not the cause.

Most people who get a degree and regret it a) borrowed a lot of money to do it, and b) saw the degree as an end unto itself, as a golden ticket.  "Oh, I'm going to get a degree in art and I'll be set."  No, you won't...but if you are an artist, if art moves you, you'll take that passion and probably, more likely than not, build it into a decent paycheck.

My $0.02 anyway...

[alextaylor]

A bit sad that the calculations are being reduced to salaries.

I took a degree. I nearly failed everything. But it was a damn hard degree in one of the best (and most expensive) universities in the world and it taught me things I never would've learned elsewhere.

I couldn't get a job because of bad grades in an unknown foreign university. I basically just forced my foot in the door with my first employer... let him hire me at barely any wage for the first 3 months. My salary went up to 'average' after those three months. Now my rates hit almost the same wage as a senator in my country. I've got two businesses which I got from bank loans - one is a restaurant, the other is engineering. And I'm making a lot of money part time from programming skills. I'm 25.

None of this would be possible if it wasn't for my degree. My degree isn't even in the field I'm working in - it's a mechatronics engineering degree. I just applied the same principles to everything else. Cooking, based on my chemical knowledge, heat transfer, object oriented design, etc. Programming I picked up better than people with CS degrees in an average uni. One of my businesses is in oil... the business skills I've picked up from being forced to do difficult presentations on things where I had no idea what I'm talking about. The technical part is petroleum not mechanics nor electronics, but fluid mechanics is easy to pick up with a heavy mathematical background and being forced to solve tough hydraulics problems in class and stuff.

If you broke me down into data, I'd be dismissed as some outlier. It'd be very difficult to link me and the fields I work in because I've never held a job in mechanics/electrical despite my degree. But everyone from my university has the same success story. Similar friends who failed several subjects and got a long string of bad grades work in top companies. Several of the most influential people in my country come from the same university even though the university has no reputation here.

And hey, I've learned that no good employer in my country actually hires based on degrees. There's a lot of grade inflation, where average students are expected to graduate with second class upper. The good employers would rather look at the 'hobbies' side of the resume and hammer the interviewee with tough technical questions rather than rely on exam results.

[chaoslord29]

I'm firmly on the side of higher education.

The benefits of at least an undergraduate degree cannot be reduced down to simple salary, and if you're really dedicated to the idea of quantifying it in economic terms, you still can't deny the networking benefits and opportunities that only higher education can offer. More than that, universities and colleges fill the niche of the last remaining "formative" years for youths/young adults, and are the late bloomers time to really shine in both academics and extra-curriculars. There's only so much that four years of school can teach a teenager, especially when they're still trying to learn what it is they like to do and reducing down a degree to the potential for higher salary (often opposed to student loans) is the last resort of the materialist.

Even a strict objectivist (Ayn Rand's two cents) knows the value of higher education, and regards a "properly motivated" (ahem, profit driven) educational institution as the pinnacle of achievement for the elite. While I may not agree with a lot of Rand's philosophy, we're at least in agreement on this point: Higher Education is what makes the elite class truly elite, and it is the greatest greatest opportunity for those not counted amongst the wealthy class to achieve greatness.

Particularly I feel like I have to say something about the humanities, about how humanities majors are by and large the most satisfied, well-adjusted, and career oriented people according to Pew Studies and Analytics, especially compared to more material oriented majors (Engineers, Physical Sciences, Business Majors; though interestingly, not Economics majors).

Granted, I don't want to get bogged down in that debate, just need to point out that the greatest benefit of higher education institutions isn't necessarily the degrees people receive there, it's the existence of the institution itself as a bastion of accumulated knowledge and the relatively objective application of that knowledge compared to profit and politically interested parties.

[Valthazar]

The benefits of at least an undergraduate degree cannot be reduced down to simple salary, and if you're really dedicated to the idea of quantifying it in economic terms, you still can't deny the networking benefits and opportunities that only higher education can offer.

I don't think anyone here is suggesting that higher education doesn't have huge benefits.  Heck, I work in that industry, so of course I realize this.  This is not a debate about whether it is good to be educated or not.

However, what I am saying is that it is doing a disservice to young people to unilaterally portray college as a beneficial endeavor, when there are thousands of recent graduates regretting their decision each time they get their monthly loan bill.  Again - college is a very worthwhile endeavor for some students, not all.  Many recent graduates can only make the minimum payment, causing their principal to rise and rise, making it a form of modern day indentured servitude.  Their social security checks will be garnished in old age, since it is impossible to file for bankruptcy on these loans.  If a high school graduate is not 100% sure about their future career, they should proceed with caution (perhaps even taking a few months off as free time) before deciding on going to college.

[Torch]

  If a high school graduate is not 100% sure about their future career, they should proceed with caution (perhaps even taking a few months off as free time) before deciding on going to college.

You are assuming this fictitious high school graduate will only be able to afford college by taking out loans. That's not the case with every student. Some students are lucky enough to procure scholarships or grants that do not need to be repaid. Some students can earn athletic grants that pay for their tuition. Some students (like my own two Demon Spawn) will have their tuition and fees paid for by their parents. Not every student will be burdened by outlandish loan debt.

[Valthazar]

You are assuming this fictitious high school graduate will only be able to afford college by taking out loans. That's not the case with every student. Some students are lucky enough to procure scholarships or grants that do not need to be repaid. Some students can earn athletic grants that pay for their tuition. Some students (like my own two Demon Spawn) will have their tuition and fees paid for by their parents. Not every student will be burdened by outlandish loan debt.

I don't deny that it is very doable for people to set up a college fund and let it grow over ~18 years.  I am also fortunate to be in such a position.  But I am willing to bet that this demographic of individuals are already middle-to-upper class (or choose live a pretty frugal lifestyle).  Not very many people are in this position.

I am referring to the average American.  71% of students have to take out loans, and the average debt is now $30K.

I'm not suggesting college isn't a beneficial endeavor, but it isn't for everyone - especially those who are attending because their "parents told them to."  High school guidance counselors have really failed in this sense, by not giving enough financial information to high school grads.

[Torch]

I'm not suggesting college isn't a beneficial endeavor, but it isn't for everyone - especially those who are attending because their "parents told them to."  High school guidance counselors have really failed in this sense, by not giving enough financial information to high school grads.

I don't disagree with you as far as the financial implications are concerned. Although my own personal experience (and that of Mr. Torch) was that college was not optional. We were expected to attend after we finished high school. Period. No arguments. And we have the same expectations of our two children. College isn't optional, it's a requirement. If they find that their life calling is in a field that doesn't require a college degree, great. They will have their degree and four years of life experience that can't be duplicated in any other setting, and then they can go off and do whatever the hell they want.

Because of our expectations, we made sure a long time ago that we would be able to finance their education so that they would not be burdened by loans. We feel that's a fair trade off. I would be hard pressed to say to a child "You have to go to college, and you have to find a way to pay for it yourself."

[chaoslord29]

I don't disagree with you as far as the financial implications are concerned. Although my own personal experience (and that of Mr. Torch) was that college was not optional. We were expected to attend after we finished high school. Period. No arguments. And we have the same expectations of our two children. College isn't optional, it's a requirement. If they find that their life calling is in a field that doesn't require a college degree, great. They will have their degree and four years of life experience that can't be duplicated in any other setting, and then they can go off and do whatever the hell they want.

Because of our expectations, we made sure a long time ago that we would be able to finance their education so that they would not be burdened by loans. We feel that's a fair trade off. I would be hard pressed to say to a child "You have to go to college, and you have to find a way to pay for it yourself."

Seconded, the combine experiences of college life is in my humble opinion spending the better part of your adult life in debt, even if your degree is totally unrelated to the field you find yourself in by the time you're finished paying it off (or even just a year after school). Higher education isn't just advanced vocational skill acquisition, it's a rounding out of the education process that begins in grade school and gives you the opportunity for a capstone on the structure that is your academic career and the potential to go on for even greater crowning achievements in grad school & beyond. For every person I know who feels like they found their calling right out of high school, I know someone who feels like they didn't find their calling until they reached grad school or a phd program. 4 years of college is worth it by dint of just being exposed to the ideas and grandeur that post-grad education can offer.

Furthermore, Torch touches on something important in terms of the financial concern, that saving for children's future in college is one of the best ways to help temper the overall expense that is rearing a child. If your child grows up with the expectation of higher education and a certain amount of financial backing for it, that's all the more security and aspirations you as a parent can offer them even if they don't wind up going to a university.

[Valthazar]

I would be hard pressed to say to a child "You have to go to college, and you have to find a way to pay for it yourself."

I also grew up with the ideology that college was not optional, and was a requirement.  I was also fortunate to get my education paid for by my parents.  But sadly, it is society as a whole today - not individual parents - that is turning college into a requirement.  Even if one hails from a poor family, students are drilled from grade school that getting into a good college is a natural progression in life.  So for better or for worse, that statement I quoted (which I would also feel hard-pressed telling a child), is happening on a broad-basis across the nation today.

Torch touches on something important in terms of the financial concern, that saving for children's future in college is one of the best ways to help temper the overall expense that is rearing a child. If your child grows up with the expectation of higher education and a certain amount of financial backing for it, that's all the more security and aspirations you as a parent can offer them even if they don't wind up going to a university.

I actually encourage people to save for their kids' college education - more people should do it.  But people are too trusting in the loan industry sometimes.  Let's say a couple has saved up $80K, and are $20K short of covering their kid's 4 year college experience.  Most people in this situation would simply opt to cover the remaining 20K using loans.

An alternative idea is for the kid to work two minimum wage jobs for 2 years following high school, and then enroll in college at the age of 20.  ($8.00 x 30 hours x 52 x 2 = ~20K after taxes)

edit: messed up my math, heh