Is it worth sending your kids to college? The case for saving money and “living a little.”
James Altucher doesn’t think you should send your kids to college. A diploma is a costly piece of paper, and over at DailyFinance.com, he argues the cash would be better spent elsewhere.
Here are his big reasons why it’s a waste of money:
- More kids are squeezing four years into five. This means an extra year of tuition.
- Tuition is nine times higher now than it was in 1976. Compare that to health care (seven times higher) and inflation (three times higher), and there’s an obvious scam going on here. Educators have recognized the perceived value of a diploma and are running with it.
- A non-graduate makes about $800,000 less than a graduate does in his life time, but that’s okay because…
- You make that much and then some by putting the $200,000 you would have spent on tuition into any bonds that return 3 percent.
- Intelligent, high-achieving kids would probably make more money by getting started earlier anyway.
- Debt. It’s increased $1,000 a year for the last decade to hit $23,000. And total student loans are up to $75 billion across the nation.
His alternatives? Start a business. Travel. Work. Volunteer. Teach yourself with books. Altucher broke the news to his own daughters earlier this week that they would definitely not be going to college. ”I’ll give my kids $20,000; go off and start three or four different businesses, and heck, fail at all of them,” he says. “That’s a life experience; that’s a learning experience… Everybody should just relax. Save money; make money. That should be the focus.”
Altucher’s assumption is that 18- to 22-year-olds don’t actually learn anything in college—they party instead. If that’s the case, what’s the guarantee that they’ll work hard and start their own business?
To Altucher, it’s all about business and money. But, as we recently learned, money doesn’t buy happiness.
—Seth Putnam
As a recent MFA grad still in his 20s (read: I’m no stranger to colleges), I have to say that this smacks of sad truths. College could be seen as the shackles of a generation–something many were told to do (and guilted into, at that) or they would never “be successful.” So, those 4-5 years turn into a giant pause button where mothers are replaced with cafeterias and coin-op laundry, and “apartment”-living carries no rent/bill-paying responsibilities. Thus, many leave as they entered: without passion.
I agree that college costs have gotten completely out of hand. My kids are still 4 and 6 years away, but I’m hearing the horror stories from neighbors who are in midst of it now. I still think there’s value in a college education, but I don’t think it’s worth spending $50k a year to get it. State schools are looking more attractive every day. Get the bachelor’s as cheaply as possible and then splurge on a good graduate school, if necessary. And if your kids are just partying their way through college, pull the financial plug.
Agree with the story, as well as neil rhein. After a very disappointing turn as an undergrad at a very high-profile private school I won’t name, I have very little to show. Halfway through my degree I got the sense that the professors had run out of things to teach and were essentially taking attendance and assigning busywork. Everything else I actually learned was available in a handful of books I could have breezed through with the right mentoring, 6 months, and a library card. To top it all off, half of the “network” I built there were either too stuck-up or too reclusive to be practical, nevermind good company.
Now in order to advance my career I have to sign up for two more years for a masters’ – and the local community colleges are lookin real tempting.
If your reason for going to college is to learn how to make a bunch of money–then don’t go.
Is getting that bachelors degree mostly just ticket-punching? Of course. But, like all interesting things, it depends – this time, on the kid.
Of course you can just cruise through college and party the whole time – i.e. a summer camp your parents send you to for four years. A few schools do a better job than others at skimming out these types. But you can also treat your four years of college as an opportunity to better yourself. I did, as did several of my friends. The stereotype of the dumb, lazy, drunk undergrad might be fun, but it really does not capture a lot of kids out there. So as a parent, you need to be honest with yourself: is my kid ready to take this experience seriously?
And by the way, comparing the returns on someone’s private school MFA with my state school BA is apples and oranges. My college education (and, later, MBA) was totally worth it.
Tuition is only $200,000 at the most expensive private universities; that’s only one path to a college degree. And, of course, Blair is 100% right; whatever you end up spending on your child’s college education, whether or not it’s worth it depends on the kid.
Ask Glassbrain suggests some alternatives to the big tuition bite. The “problem” is that people equate education with vocational training, and the reality is that we may lose our spouses ands careers, but no matter where we go and what we do, our minds stay with us. Why not stock the one constant in our lives to be an interesting place? Besides, most of us have lives after 5 pm and ought to want more from an education than a set of job skills.
That said, consider:
1. Send you kids to community college for two years, then transfer to State U. Basic courses are basic courses–just be sure the credit-transfer policy in your state is smooth. This saves bundles.
2. If you are georgraphically well situated, tell you kids they will be commuting students–live at home. Take a bus or subway.
3. If you insist on Big Rep U., insist that your kids max out summer school opportunities again at the local community college. Fiften credits at the CC is a half-year of “free” tuition, and can probably be taken in two or three summer sessions. If tuition at Big Rep is $50K/year, summers at the local CC at night, while your kid is flipping burgers, can amount to $25,000. Bottom line: Bio 101 is Bio 101 everywhere.
4. If your expectation is to buy a ticket to upper-class existence for your kid with a High Prestige, High Competitive school, the Ivies, for example,bear in mind that those schools run 35 – 50% freshman admissions as legacies. Not all applicants are equal: the best way to get into Harvard is to have Daddy be a graduate.
5. If your kid is marginal for college–get him/her into a Voc Tech HS asap. You can’t ship jobs for plumbers, HVAC, carpenters, etc. overseas, and skilled labor is always in demand. If the neighbors sneer, when they need a new sink, charge ‘em double!
Glassbrain