The following is a guest post from Squirrelers reader “The Bean Man”. My Editor’s Comments will follow.
I’m an avid reader of Squirrelers. And over the last few months my conversations with a co-worker have altered my thought process on one way to best prepare for the future – don’t get a college degree.
Throughout this past year, my co-worker has been updating me on his daughter’s college selection process. As a family they have evaluated over 12 public universities (in state and out of state) ranging from Colorado to University of Wisconsin. I was literally shocked to hear how much tuition is at each of the schools! However, being a bright student it was likely that she would end up with at least a partial scholarship to help offset costs. However, in the end her total annual tuition with scholarship funding still costs > $30K!
The thing that surprised me most about my conversations with my co-worker is how much a typical college education has risen since I went to school. A college education has almost been considered a given right for anybody in the middle class or above. But I wondered – is this about to change?
According to the US Dept of Education, the average annual cost of tuition and living expenses has risen from $7,600 in 1990 to $20,400 (in 2010 dollars). On the surface it appears worth it because the difference in annual salary between high school graduates and college graduates is approximately $20K. These numbers suggest that the payback time of a college education is 4 years ($80K total college expense / $20K annual salary differential). However, I feel that this is misleading at best and it may be better not to attend college at all.
1) The average salary of non-college educated people ($22K) is weighed down by minimum wage workers. $22K equates to under $11 per hour – barely above minimum wage. What would the average wage be if one only looked at the segment of workers who had the ability to go to college but chose not. This segment would include skilled trades such as carpenters, welders, chefs, seamstresses, small business owners, etc. Surely this group is making more than $11 per hour! I would go further to say that many in this group are earning much more than the average college graduate wage of $22 per hour.
2) The debt burden of the average college graduate is on average $24K – taking years to pay off. Imagine the debt levels of those graduates hat don’t have parents to fund the costs? Those without college debt are free to invest their savings quicker and accumulate wealth faster.
3) With unemployment at 9% many freshly minted college graduates are floating sideways at best. While the same can be said of non-college graduates, at least they haven’t accrued tens of thousands of dollars in debt and given up four years of productivity.
I know that many will disagree with my thoughts on whether college makes sense. However, one thing we can probably all agree on is that a college education is no longer the slam dunk decision most of us have considered a right.
Editor’s Comments: What do you think of the guest poster’s premise? Personally, I am in the camp that thinks college should be a goal for just about everybody, and that a college degree is now what a high school diploma was a generation ago. That being said, I agree with The Bean Man’s theme of college being expensive and potentially a big source of debt that takes a long time to pay off. Accordingly, I think prospective students and parents need to be sure not to make a decision that creates a massive financial burden for years to come, and instead choose wisely and consider ROI.