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May 10, 2011


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My take on it is this: When everyone out there has a college degree, and the job you're trying to get is between you and some other person whose skill set & charm is exactly equal to yours, except that he has the college degree & you don't, then HR will pick the guy with the college degree. So many people have a degree now, and the job market is really tough. So it seems HR will always pick the guy with the degree over you, all other things equal.

I suppose if you have more experience than everyone else out there, but no degree, you'll be ok, but for those who have no experience, and can't get their foot in the door, it seems a degree is needed just to even the playing field. But ugh, don't go way in over your head to get the degree. The crushing debt isn't worth it.

I think that college degrees are extremely valuable. It is possible to get a a degree and have a manageable amount of debt.

I've found that too many college students now are lazy and don't want to get a job. They just want to have fun and party. There is no problem with having fun in college because that is part of the experience. However, students need to understand the costs of a degree and work while attending school. That is the formula that I followed and I left school with a reasonable amount of debt and paid it all off within a few years of graduating.

The gap is getting smaller in part because college costs are increasing much faster than inflation and wage growth (not to mention starting salaries.)

Either college gets cheaper or the gap will get negative creating a bigger backlash. I guess tuition is not price elastic for some (and aid can change the elasticity to some extent) so it may take much more price increases before there are big drops in enrollment. This debate may well be part of a bigger trend.


Here in Germany, where I currently live, access to the university is metered through testing of your children as they progress through school. Therefore, there is a robust 'vocational' route which allows for careers in the non-professional job sector. I get great service in those areas where we have a lack or more often than not lackadaisical attitude towards the job. However, I'm not comfortable with the fact that you are typecast very early on (10 years old).

In the US we've morphed into 'requiring' college of people for jobs that truly do not require them. I remember when going to college was a big deal and one needed to have the funds and smarts to do it. Now, it seems as though it's just what everyone does. I am an engineer and that requires some post high school education - very rigorous. In the 1980's they talked about the undergraduate degree requiring 5 years - I can't imagine how much the students need to know now! However, when I work with technicians, I don't see that they require a university degree - they use a practical guide prepared by the engineers for their work.

On a similar note, I don't know if you've been reading about the bubble in higher education - hugely increasing costs with a concomitant decrease in the value of the degree, especially in the liberal arts arena. Perhaps this is occurring because of general economics - the more people who have degrees lessens the value on the market (more supply-less demand). While I believe that a rigorous liberal arts education is very valuable to living a learned life, I don't know if in today's world it is a marketable commodity that is valued. Caveat, the respect for an engineering or hard sciences degree has increased greatly, probably due to the decrease in value for the liberal arts degree - a perception of the amount of work necessary to earn those degrees.

What's the right answer? As you say, it depends. I think that one needs to know what one wants to do - and that can be difficult when you are young. One of the great things about the USA is that we have access to education throughout our lives so that if we decide to change our careers, we can as we have access to the training paths required at any time. For an average young adult, I would spend the first two years going to a local community college getting many of the general educational credits finished while exploring my avenues - much cheaper and after two years I have an associates degree. Then, I would transfer to a state school and finish up the degree course. If I didn't know what I wanted to do either at the two year point or the four year point, I would work in something or perhaps join the military. It's amazing how the world of hard work can change the motivation of a young adult as well as focus their efforts towards a career they desire.

College is such an individual decision.

However, I think everyone needs advanced education of some sort, be it college, vocational school, whatever. The question is, when to go? Not every kid is mature enough to handle the rigors of higher education when they are 18. Plus, most people really don't know what they want to do at that age. Even those that do know end up changing their mind again anyway.

Fact is, 'unskilled labor' jobs are evaporating in America. Everyone needs to have some skill. It is just hard to know what that skill is that best suits you.

I think part of the problem is this country had a huge push to tell kids to go to college. We do have tons of people doing jobs right now that don't require a college degree, except now we are requiring them for everything. There has been a stigma attached to not getting a college degree, and it has turned into anyone can buy a college degree.

this has made the market for people with college degrees over saturated for some fields, rendering the degree useless. Obviously people with a worthless degree are going to feel that college as a whole is worthless.

What needs to happen is the stigma needs to be taken away from vocational studies. I also think colleges need to be more regulated. The for-profit schools that have cropped up everywhere diminish the overall value of a college degree.

I would love to see a system like many of those over in Europe where college entrance is limited, but the education itself is much less expensive.

Degree is just an entrance ticket, what one truly needs is skill and experience. But without a degree, who's going to call you for an interview?

The equation is pretty easy:

College Worth It = low/no debt + degree with income generation value
= mid/high debt + degree with high income value (ie medical doc)

College Worthless = mid/high debt + degree with low income generation value

I think it depends on what one is choosing to major in or the career path one is taking. There are so careers that definitely required college degrees (i.e. doctors, lawyers, etc.). However, the income one gets is worth the cost of tuition. Then there are other fields (i.e. social work, the arts, and similar fields) strictly speaking from a financial point of view, sometimes the cost of obtaining the degree outweighs the earning potential. Again, it depends. However, having said that, everyone needs some particular skill set. It is true that a lot of vocational careers can definitely be a lot more profitable financially than obtaining a college degree. You'd be surprised how much some blue-collar workers make in comparison to those who work in corporate america and have college degrees.

I agree with bb. The important caveat to that though is to make sure that degree is from the right place. I'd either make sure it was from the college that will make you the most likely to get a call (Harvard, Stanford, MIT etc) or from your state school which will leave you with the least debt.

"Leaving college with a ton of debt (she said $140,000-plus) is not the way to prepare for a well-rounded and healthful life."

Why are people so hung up on student loan debts >$100k? I mean that is NOT at all typical. 90% of college undergrads have less than $50k in debts. I can't find stats about how many have >$100k in student loans but it HAS to be a very small %. Obviously its under 10%. Likely under 1-2%.

Obviously taking on way too much debt is a bad idea. But that doesn't mean college is a bad idea. Its like saying a $900,000 mortgage is a bad idea so you shouldn't buy a house. Or saying that borrowing $80,000 to buy a car is not a smart move so you shouldn't own a car.

Only a small percentage of well paying, satisfying, and rewarding jobs can be performed by high school graduates.

Once you realize that, then the need for higher education becomes obvious. In my case, once I started work I quickly realized that a BS in engineering was not nearly enough and that an MS was essential if I expected to get promotions, to survive layoffs, and to climb the ladder to success. Fortunately the major aerospace company that I worked for had an "Early Bird" program in conjunction with a nearby private university that offered the required courses in many fields of engineering.

This university, the oldest in California, was founded in 1851 just after California became a state in 1850. An MS degree requires a B average and the company refunded the tution for every course in which you received an A or a B, thus my MS degree cost me nothing, other than the cost of text books. I was already married with two children in 1960 but as soon as dinner was over and the kids were in bed, I sat down at the kitchen table, hit the books 5 nights/week, and graduated in 1963 with an MS in Engineering Mechanics, the degree that was most applicable to my field of work.

My undergraduate degree was obtained between 1951-1956 while I was an apprentice at a major British aircraft company. The company allowed me to take classes one day/week and 5 evenings/week at a local municipal college and the only cost involved was the purchase of text books

My educational costs were thus minimal and I had a very satisfying career progressing from a junior engineer to a senior staff engineer for the manager of the Missile Structures department. I never had a single day's unemployment during my whole working life. With the added help of my wife, of 55 years who also worked as soon as she could we were able to retire in 1992 when I was 58. Along with a rising market during the decade of the 90's and educating myself how to become a successful active investor, we are now wealthy and very happy. Our three children, only one of whom graduated from a nearby state university, have also done well. There's an old proverb that also applies to raising children, it says, "You can lead a horse to the water but you cannot make it drink."

A good education in an appropriate field that has good job openings provides the groundwork for later success, but it does take lots of hard work, drive, and dedication.

@Old Limey - many jobs that not require a college degree used to be ones that you could work your way into. College wasn't a requirement until recently. For example, I know many engineer techs and CAD designers who worked their way to where they are, but when it comes to hiring, many companies will not look at someone who doesn't have a degree.

I think the fact that there are some fields that require advanced college degrees, such as social work for example, that pay absolutely horribly. But they are necessary jobs. If we boil everything down to "is it worth it monetarily" then no one would go into those fields...

@Old Limey - You have been candid in past postings about how you have helped your three adult children financially, i.e. managing their finances, providing them housing at or below cost, helping them through divorces.
Given your post above that just one went to college, do you think their status(es) in life would be different (and if so, how) if you hadn't been able to channel the largesse of your success to them? In other words, your children have done well, but how much has been on them (college education, aptitudes, attitudes) vs. on you?

@Old Limey,

In reference to your post above, you have hit on a crucial point, your initial degree was paid for. I, too, was educated in Europe and graduated without debt. I 'trained' as a nurse in the old apprentice model. We worked for pittance, over 3 years and completed our studies in 'blocks'. My credentials were equivalent to those of a US graduate and I took (and passed) the NCLEX exam. I see student nurses entering the profession with $$$ in debt, and I wonder how different my life might have been if I had been 'saddled' with all of that debt. Our oldest child is now looking at colleges and I am trying to steer him through the mud as best I can. I agree that colleges here are a 'bubble' and that there are many who enter who should possibly have considered an alternate route.

I understand that "it depends", but I guess that because I myself am a college student I am somewhat biased as to the opinion that college is definitely worth it.

I am very entrepreneurial and when I look at people like Mark Zuckerberg who never graduated college I think to myself, why am I doing this? I know many other very successful businessmen that dropped out of college to pursue other opportunities and they haven't looked back.

I guess the fact is I believe that my investment will pay off. I am paying my own way through college and so far it has been worth it. I am learning so many things that I never in any other place would have been able to learn. I am grateful for the opportunity I have to attend an amazing university and recommend college to everyone.

I am in the college is not for everyone camp and we need to offer options that society accepts for skills that should not require a college degree. (Business/accounting etc would be examples)

"I don't have a degree and I get paid more than people I know who have one."

This doesnt mean anything. I know a guy who has a great gambling strategy- Always bet on green 0. He never loses. Exact same logic/ irrelevant statement.

I agree with you that the European system worked well for both of us but in my day there was a strong "Class" system. Not too many working class kids like me had an opportunity to go away to college and there were very few colleges available in my day, thus the apprenticeship system worked well. My 5 year apprenticeship started at 1.5 pounds/week (about $3) and ended at 8 pounds/week (about $14). I started off as a Trade apprentice but because I had passed the exam at 10+ and had attended a first class Boy's Grammar school I was changed over to an Engineering apprentice fairly quickly and my "blue overall" days were over. It wasn't until after I had emigrated and the Labor Party was able to reform the system and start building universities in every city of about 100,000 - 150,000 population and up that the working class got a fair shake. Neither of my parents were well educated and nobody in my whole extended family had ever received a degree. I was the first when I got my MS in California. My English qualification was the equivalent of a degree in Engineering but with everything omitted except for Math and Engineering classes. It was accepted throughout Britain and to my surprise it was also accepted in both Canada and the USA when I emigrated, possibly because there was a huge shortage of engineers at the time.

college is worth it if one have a greater goal. the greater goal must be something one want to do the rest of his/her life.

FMF, I read the Costco magazine every month. I really enjoy the feature stories on different businesses, plus the debate column that you mentioned here.

I don't think college is for everyone. I noticed that just about all the comments here had to do with how hard it is to find a job without a college degree.

Actually, I'm hoping my kids turn out to be entrepreneurs, instead of employees, and start their own small businesses.

Nobody asks the lawn care guy, the store owner, the baker, the builder, the landlord, or the blogger whether they graduated from college. They may need certification and training of some kind, but not necessarily a 2 or 4-yr degree.

This is an interesting article on topic. The article cites that 5 years out there is no difference between public and private college (paraphrasing). Interesting anecdotal evidence too.

This is a duplicate posting since the first one seems to have gotten 'lost':

I disagree with the commenter who said that the number of college graduates with major debt is a small percentage. I graduated in 1994 with $32,000 of student loans (stupid, and that was a long time ago!). Two of my nephews are graduating this year. One will have over $150,000 (law/finance degree) and the other about $90,000 (soft sciences).

My daughter is a sophomore in high school. I tell her to pick an affordable college because she will have to earn scholarships, take out loans and work her way through (I have 3 kids in private schools and can only give so much $$). When my daughter told her guidance counselor this, the counselor told her that no one is able to 'work their way through college these days' and that it sounded like her parents (ME!) need to be educated on the realities of the cost a college education.

Needless to say I was very upset with her response.

The class of 2011 will graduate with avg per grad debt of $23k according the National Center for Education Stats.

This stat alone is irrelevant without more information. (Just like Holly's stats about her nephews.) 23k is not a lot of debt if you can expect to make 100k. 150k of debt is not a lot of debt if you can expect to make 500k.

The biggest issue is the avg salary for these undergrads is expected to be 37k.

Since college is an investment and not a vanity purchase it should be analysed as such- which is very easy to do.

Cost of the edu (including debt expense) + opportunity costs - income while in college= investment

Present Value of the life time expected additional earnings from the degree (gap between non degree holders and degree holders).

If the present value of the earnings is less than the cost today, its a bad idea to go to college.

Debate over.

I think I had the best of all worlds.
Cost of my education = Zero
Income lost while getting my education = Zero ........ Apprenticeship + Company funded MS degree.
Total Income from 36 years of work = $1M+ ........... I ignored the trifling income I received as an apprentice for 5 years, half of which I gave to my mother.
In my case I would never have been hired without my education because it was essential to my work.

I lost out on campus life however - Well you can't win them all!

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