Are college degrees really worth the money anymore???

The Investor Rebellion » Are college degrees really worth the money anymore???

This writer, the associate editor of Smart Money magazine, says that in our current system, the answer is no. I agree with him 100%. How many college graduates that just graduated in May or June have found jobs (that pay money)? Have a majority of them? I doubt it. Even though many of them don’t have a job, what all of them DO have is a record high amount of student loan debt. Was it really worth the $50,000 - $200,000 that their parents spent, for them to have a very hard time finding a job PLUS have a massive amount of debt? I agree that it’s not colleges and universities’ fault that the economy is bad and this is the worst job market in decades, but I agree with this writer that a college degree today is just not worth the enormous cost. By the way, I myself do have a college degree (business) and did graduate from a relatively expensive 4-year university, so I include myself in this criticism, and part of this is my own frustration at how little I feel my college degree has really helped me for the money it cost.

Do you know what Bill Gates, Steve Jobs, Larry Ellison (CEO of Oracle), Michael Dell, and Paul Allen all have in common? Yes, they all are some of the wealthiest men in America, but that’s only one of the things they have in common. The other thing they all have in common is that NONE of them have a college degree and none of them graduated from college. Not one of them. So yes, it is true that college graduates, on average, earn more money than people without a college degree. However, keep in mind that many of the wealthiest men in America, as noted above, do not have a college degree and did not graduate from college. Also, as this writer illustrates, the additional income that a college graduate makes does not necessarily make up for the enormous cost of a college degree today, combined with the minimum 4 years of time they spent not working and not saving money and earning interest on that money.

From 1995 - 2005, the cost of a public college increased 51%, and that’s BEYOND inflation. It increased far more if you factor out inflation, and that’s still as of 4 years ago. It absolutely has continued to increase, possibly at an even more rapid pace, over the last 4 years. The cost of a private college increased 36%, again beyond inflation, over that same 10-year time period from 1995-2005. The amount of money parents and/or young adults have to spend in order to obtain a college degree has gotten absolutely out of control and off the deep end. Furthermore, that assumes that the student obtains his or her degree in four years and finishes college in four years. Over 40% of students that enter college have not gotten a degree yet after SIX years!!! This even further increases the average cost of getting a degree. And just what does that college degree get you today anyways?

Unless you are a lawyer, doctor, nurse, engineer, or teacher, college graduates are not trained in a specific trade. The majority of college graduates, in my perception anyways, graduate with a business degree or some B.S. liberal arts degree that in my opinion means absolutely nothing. Those graduates are not trained and skilled in a trade and/or craft, so they enter the workforce not very well-prepared to find a job and start a career. Does college teach you how to sell? Does college teach you how to be a programmer? Does college teach you how to hire, manage, and fire employees? Does college teach you how to get a small business loan, or how to raise capital from potential investors? In my opinion, in our current system today, no it does not. So just what does a college education teach someone?

According to a 2005 study by the U.S. Department of Education, college graduates “have not actually mastered the reading, writing and thinking skills we expect of college graduates.” The study found “a remarkable absence of accountability mechanisms to ensure that colleges succeed in educating students.” Literacy levels among college graduates, the commission noted, fell sharply over the 12 years ending in 2003. Why is this? The writer believes that colleges and universities have made it easier to graduate and get a degree, creating courses such as Campus Culture and Drinking (Duke University) and History of Comic Book Art (Indiana University) for students to take in order to complete minimum requirements to get their degree. How ironic is it that colleges created a class on college drinking? Today’s college students need to take a CLASS to learn about drinking????

I have been frustrated that there are no college courses whatsoever on personal finance, investing, home ownership, and/or managing your money. Robert Kiyosaki has spoken out about this for years. People pay tons of money for high education, but they receive no financial education whatsoever. High School doesn’t offer anything along these lines either. This partially explains why Americans are in so much debt, and things like taking out a home equity loan to buy a plasma TV or take an expensive vacation have been so commonplace. I do agree with Kiyosaki when he says that we need far more financial education in America, and NOT from stock brokers or “Financial Advisors”.

Please do not take this as me saying that education is a bad thing. Education is very necessary and is an extremely critical part of our society and our economy. I just feel, as does this writer, that our current system of college education and college degrees is fundamentally flawed, primarily because it has become just so darn expensive. As I said earlier, there are some trades where it is necessary and thus makes sense, such as nurses, engineers, teachers, doctors, and lawyers. People who graduate with those degrees graduate with training in a specific trade that they can immediately build a lifelong career around.

Given the enormous cost of most 4-year colleges, I think there is a much better R.O.I. (Return On Investment) for a high school graduate to attend a vocational school that teaches them a specific trade. Learn how to be a plumber, mechanic, welder, chef (culinary school), hair dresser, truck driver, carpenter, etc. You can even become a nurse (LPN, not RN) without a 4-year college degree. Those vocational schools are FAR less expensive than the 4-year universities, and again, you graduate with training and skills in a specific trade and occupation. This makes it much easier to find a job, in my opinion anyways, than a 4-year B.A. degree from a college. If you are a salesperson and/or want to be a salesperson, then you really should be able to find an employer who will hire you even though you don’t have a college degree, because a college degree has absolutely NOTHING to do whatsoever with whether or not someone can sell and produce revenue for a company. I also think a small, local community college will produce much greater R.O.I. than a big, 4-year university, simply because the cost is so much less and the quality of education, in my opinion, is about the same.

The cost of a college degree has just gotten totally out of control. I hope that one of the effects of this economic collapse is that we see college tuition come way, way down. I also hope that we see the societal and cultural stigma of not having a college degree go away, along with even the social status of parents saying “My son goes to Duke” or “Our daughter goes to Penn”. Do you really think it’s worth the money? I personally do not.

http://articles.moneycentral.msn.com/CollegeAndFamily/CutCollegeCosts/is-a-college-degree-worthless.aspx