Is college worth the cost?
Posted on October 14th, 2008 – 5:51 PMBy Kara McGuire
I wrote a column on this subject a couple of years ago, but I thought I’d revisit it because two new stories came out this week that are worth reading.
One is from my colleague Jackie Crosby, who profiled a young couple drowning in student loan debt.
The next is a story from the Chicago Tribune that suggests factoring in after-college earnings when deciding whether to head to a specific college, or any campus for that matter.
I’m sure you’ve seen the stats about how college grads make a lot more money in their lifetime than workers without a degree, but given the fast-rising cost of higher education, stagnating wages, and a tight credit market that’s making it tough for some to qualify for enough student loans to make it through, it begs the question.
When I recently shared my concerns with my husband about paying for college (we save a whopping $100 per month for our two small kids in a 529 plan), he said that he thinks something will give by the time our kids attend school. Either college inflation will be put in its place or some reforms will be made so middle class families like us will be able to send kids to college without mortgaging the house (c’mon, credit will have eased up by then I figure), making major sacrifices, or sending our kids into the world with six figures in college debt.
If not, he figures we’ll have swung to a point on the pendulum where college has become so expensive that enrollment numbers plummet. That’s hard for me to believe, but who knows?
What do you think? Is college always worth the cost? Anyone’s college plans been affected by the current economy, the credit crunch, or the recent stock market dive?
10 Responses to "Is college worth the cost?"
I don’t think college is always worth the cost. I personally love learning and from that point of view, college is wonderful, however, it is not worth paying more for it than you will ever get returned. When I decided on a school, I calculated what my expected earnings would be with the degree I was getting and how much debt I would incur going to different schools. This informed my decision on which school to attend based on my assessment of an acceptable debt level.
Part of the reason to go to college is the experience, but the bigger reason is future earnings. If your expected return does not pay back the debt, it is probably a good idea to reassess the decision.
I agree with Heather - look at the payback…is it worth having the “experience” when you are 30 and have 60K in debt and the person in the next cube has 30K?
I don’t foresee reforms (code for free money??) helping out much - those who are fafsa-savvy know that those with combined incomes of over 100K are not going to get much help besides loans.
You could create another post that asks “Is private school (k-12) worth the cost?” We have several friends sending kids to private schools - ranging from 5K per year to 20K plus…
I wonder how changing demographics will play into college costs in the future. Right now, we see the largest pool of high school graduates since the baby boomers - this is the so-called echo boom. Colleges are racing to build new dorms and buildings to accomodate this increase in enrollments.
But, I assume Gen X will have many fewer children than the boomers (fewer Gen X members having fewer kids). The smaller pool of potential college students will increase competition for students, which may force colleges to offer better aid packages. Also, with fewer students, there is more aid to go around.
The downside to the building boom on campuses, however, is that those costs may be passed on to future students if enrollments fall.
Re kids going to college, I discourage college unless they can point to a carrier path that will provide a high enough return (earnings) on the tuition investment. In some cases, technical training will provide a far greater return on the education investment than certain degrees in the college setting. You can’t economically justify how much the Colleges and Universities want to charge for some of the liberal arts degrees that have little or no career prospects. If your goal is education for the sake of education, ok, or if it is a base for an advanced degree that will have a higher payoff, better, but based on just the economics of certain degrees, no - don’t do it.
The reason for college, in my opinion, is NOT a bigger paycheck — it’s to get an education. My dad, who sacrificed so I could get a good liberal arts education (yes, I had loans too) said it was to “learn how to think” — although my classmates always said, “What? Don’t you already know how to do that?” I still wouldn’t trade my degree in English for the world; it also helped me through grad school in an unrelated subject. (THAT was a more practical decision).
That all being said, I’m glad I went to school when the max in student loans was (only) $10K. It’s hard to believe what the costs are today. I chose not to have kids, but if I were a parent or were going just starting out now, I’m betting that tuition costs would play an even bigger role in the choice of where to go.
No matter how many times someone will try to convince me, I have a very hard time believing a private school is ever worth the cost, even with all the arguments about connections and how it looks on your resume.
Elizabeth Warren’s book, The Two Income Trap, addresses education in a very interesting light. She basically says that it does not follow the same supply and demand curve as everything else, because parents simply will not sacrifice their child’s education. Perhaps an ipod or car or designer jeans, but never their educational prospects. That has basically given colleges free reign to spend whatever they want and charge whatever they want, because college enrollment does not plummet when the price goes up (or at least hasn’t so far) the way prices fluctuate in other markets. Instead of a school specializing in research, or liberal arts, or their big 10 sports team, they want to be a school that can offer top programs in ALL of those areas, and that’s when the cost is driven up.
I read Crosby’s article about the two children hampered with debt, but her final statement rubbed me the wrong way. She chose private school, private school debt, and then to buy a house. It’s not the government’s fault (especially as the government DOES subsidize education at public schools…not that the U is super affordable anymore, but it’s still cheaper than Augsburg).
“What do you think? Is college always worth the cost?”
NO. Some kids aren’t ready for college. A former co-worker had gone into construction after high school, while most of his peers went straight to college. After a couple years of physical labor every day, he decided he should go to college. In the meantime many of his high school buddies had dropped out, or fallen into the 6 year plan. Mike got a lot out of college, having learned that a career in the trades wasn’t for him. But a lot of folks in college don’t have that same motivation. For me, a summer job in a cheese factory was remarkably motivational.
It’s becoming more and more common for kids to take a year or two off after high school to do something–usually either just making money or doing something like AmeriCorps. I think that’s a great idea, and in many ways I wish that I had done something like that.
Not going to college is a silly choice. That’s like not having plumbing in lieu of fixing it.
Vote for politicians who will work to return public schools to “public” (ie, the state pays for them). Also, make sure they work to reinstate the federal grant system.
Those two steps might bankrupt the private loan industry, but they’ll return schools to accessible. And if you can’t get in, THEN you’re not meant to go.
The “give” your husband references is simply a reversion to the past, before the private loan industry started to lobby and then cash in.
Cut education funding and quit putting money into a “black hole”.
