Avoid College?

“You have four years to be irresponsible here. Relax. Work is for people with jobs. You'll never remember class time, but you'll remember time you wasted hanging out with your friends. So, stay out late. Go out on a Tuesday with your friends when you have a paper due Wednesday. Spend money you don't have. Drink 'til sunrise. The work never ends, but college does..."” - Guitarist Tom Petty

DailyFinance.com has an interesting article titled, Seven Reasons Not to Send Your Kids to College. I was recently talking with my wife about the NY state HS exams in which 30% more students failed under new grading rules. It's horrible, she said, that so many HS graduates are not prepared for college. I countered that perhaps not everyone should be expected to be college ready. Before WWII, college attendance was mostly for the very rich or those on professional tracks like law and medicine. Everything changed with the GI Bill that paid WWII veterans to get a BA degree. By the next generation it became normal, even expected, for children to go to college and a college degree (of any type) became required for many jobs.

So is college worth the cost? The Seven Reasons article says no.

1. More than 60% of students require more than 4 years to graduate so the cost may be higher than you expect. I wonder if this includes summer classes to makeup low grades?

2. The rate of inflation for college expenses is 10% a year! Since 1976 tuition has increased 9-fold versus 7-fold for health case and three-fold for general inflation. There is fear amongst university administrators that the tuition bubble is about to burst. College is no longer affordable, especially in this great recession.

3. A college graduate can expect to earn $800,000 more over a 45 year career. But if you invest $200,000 at 3% instead of spending it on tuition, room & board, and text books, you'll earn $851,000 over 49 years (45 working + 4 college). So if you put your money in a trust for your child, they may come out ahead.

4. The average debt burden of a graduate is $23,000, up from $13,000 ten years ago. Debt for a professional degree (graduate work) can exceed $200,000. That's a horrible way to start your career.

Not paying for college does not mean encouraging stupidity or idleness. Here are options to consider:

- Send them to a trade school or apprenticeship for profitable work in plumbing, electrical, HVAC, etc.

- Allow them to enlist in the military and let it teach your child a trade and pay future college bills.

- Have them apply for a union job. Auto union workers and government union workers are doing quite well financially without college degrees. I know Iraq war veteran who is second generation garbage collector for NYC and is quite happy with the salary and benefits.

- Invest in your child's business venture(s); but require them to present a business plan first. Most attempts will fail - that's normal and they'll learn from the school of hard knocks. Thomas Edison was famous for his many failures but when he succeeded it was big. Ditto for Babe Ruth - he was the strike-out king but when he connected he was also the home run king.

- Give your child money to travel the world or hike through Europe. They'll learn much more about the world than they would from a book or lecture.

- Encourage them to get a blue collar job. They'll learn the value of honest work and the value of money. After a few years they may decide that they want to attend college for a business or management degree - but now they have a goal with experience to back it up. I know a mature TV studio technician who has decided he wants to be lawyer so he can sue his former bosses. He's just completed his BA and will begin work on the law degree. I also know a legal secretary who was sponsored by the law firm she worked at to get a law degree.

- Encourage them to volunteer full-time or go on a mission. The Peace Corp and foreign missions are other ways to see the world.

- Encourage them to educate themself! College level text books can be checked out from the library or purchased used online. There are many excellent online university courses for free. With computer programming there are free code compilers and many free tutorials online. You can teach yourself coding and have all the tools you need for free (except for the computer).

Bottom Line

There's nothing wrong with delaying college until a person is mature enough to appreciate the value of what he/she is getting for the vast amount of money spent. For the self-starter, create a business or product; but be sure to do some reading on business principles or hire good managers. The computer industry is filled with stories of startups who created a great product in their garage, achieved national success, and then failed or were forced out of the company because they had no experience running a large company.

Here's a book on the same topic:
Higher Education?: How Colleges Are Wasting Our Money and Failing Our Kids---and What We Can Do About It

And a related story I just read:

For-Profit Colleges Caught On Video Encouraging Financial Aid Fraud
Investigators found that all 15 colleges investigated "made deceptive or otherwise questionable statements to GAO's undercover applicants," and four of them "encouraged fraudulent practices."
The investigation also found that for-profit colleges are often a waste of money because the same associate's degrees and certificates are usually available at nearby public colleges and community colleges for significantly less. For example:
“A student interested in a massage therapy certificate costing $14,000 at a for-profit college was told that the program was a good value. However the same certificate from a local community college cost $520.”