Who Says College is Worth the Cost?

Is College worth it?” asks the fun-lovingly named blog EndoftheAmericanDream.com.  I certainly used to think so. I went to college a few years back, because, as Colin Hanks says in Orange County “that’s what you’re supposed to do after high school!”

Upon immigrating from Greece to the United States, my great grandfather even chose to go to a small town in Ohio named Wooster to open up a restaurant, rather than move with the rest of his family to Detroit (which was growing rapidly back then) because he wanted to be near a University. That way his children would most likely go. And they did go, and back then it was probably worth it. My grandparents were quite successful. As were my parents who paid for college by being RA’s… and they actually made a profit. Oh how things have changed. The blog lists 11 very troubling signs:

#1 According to the Student Loan Debt Clock, total student loan debt in the United States will surpass the 1 trillion dollar mark in early 2012.

#2 Total student loan debt in the United States is increasing by approximately $2,854 every single second.

#3 The average college student now leaves school with $24,000 in student loan debt.

#4 Approximately two-thirds of all college students graduate with student loans.

#5 The total amount of student loan debt in the United States now exceeds the total amount of credit card debt in the United States.

#6 Over the past 25 years, the cost of college tuition has increased at an average rate that is approximately 6% higher than the general rate of inflation.

#7 Back in 1952, a full year of tuition at Harvard was only $600. Today, it is $35,568.

#8 Average yearly tuition at U.S. private universities is now up to $27,293.  That has increased by 29% in just the past five years.

#9 The cost of college textbooks has tripled over the past decade.

#10 Since 1978, the cost of college tuition in the United States has gone up by over 900 percent.

#11 One survey found that 23 percent of college students actually use credit cards to pay for tuition or fees.

All these student loans (which are not erased in bankruptcy) are just pushing more and more people into debt, including many people who have no need to go to college in the first place. As the article sums up, “[college] is a 4 (or 5 or 6) year vacation away from reality.” But “going to college can be an incredibly painful financial decision as well.” So if you’re going to get a degree in engineering, go for it. Sociology on the other hand, maybe it’d be better to start looking for a job…

Photo Credit: The Posse List

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  • Jerry

    It’s crazy. My cousin asked on facebook if someone could give him $60,000 to pay off his student loans. A girl I dated once who is friends with my cousin then said “Only if they give me $80,000 first to pay off my student loans.”

    I just said that’s a lot of money. I wasn’t going to tell them I have $20,000 in savings and another $15,000 in my Roth IRA.

    Oh, and I went to college for approximately 1 and a half semesters. I sucked at college like I did at high school. So I went to work, which I like to think I’m pretty good at.

  • Andrew is right about student loan debt and bankruptcy except one slight wrinkle: you can’t liquidate student loan debt in bankruptcy unless you can prove it is an “undue hardship”. That is difficult to do.

    It’s pretty amazing. Federal student loans are government obligations that follow you forever, which is rough when they’re 5 or 6 figures & you can’t find a decent-paying job.

    Formal education is financially justified by society looking at the average increase in lifetime earnings. Hopefully parents, teachers, coaches, mentors, government officials, and every other acting member of society will stop telling kids from the cradle they have to go to college to make something of themselves.

    There are other options. Entrepreneurship/self-employment. Trade school. Self-education at a time when there has never been more information and resources at our fingertips. Straight to the workforce.

    Many people would be better served going to college a few years after high school anyway, when they’re more focused and worldly.

    The more in demand/valuable your training is in college (engineering, computer science, etc.), the better, but people can still be left with mountains of debt and less appealing salaries than hoped. See here.

    The college tuition inflation trend isn’t going to reverse anytime soon. Government will continue to provide lots of financial aid (fuel demand), society will probably continue to pressure kids into going to college, and as long as the unemployment rate is high, that’s all the more reason for people to go get their formal education on. It’s a vicious cycle.

    We’re already hearing that a Master’s is the new Bachelor’s. This type of thinking, pushing people to obtain the next higher degree to preemptively remain at par, is the wrong approach. Master’s and doctorates are helpful to some people in some cases, but not everyone. And I tend to believe that a Master’s should come later in one’s career, when the area of study can be applied directly to the job they’re doing with the organization they work for.

  • Pingback: Back in 1952, a full year of tuition at Harvard was only $600. Today, it is $60,000. « InvestmentWatch

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