Is College Worth The Cost?

By Jeff Paul

The individual debt for college graduates in the United States is now above $30,000. Meanwhile, all of the world’s knowledge is nearly free because of the Internet. And we’re transitioning from a jobs economy to a skills economy. So we’re at a unique crossroads that creates a new paradigm for teenagers and their parents where college may not be a guaranteed path to a better life. But what choices do we have?

My oldest son is 18. He was homeschooled and has no plans to go to college. Instead of formal school, he traveled throughout his teens with us as a family and with Project World School. He’s already visited dozens of countries. Along the way, he acquired certifications for scuba diving, driving, and as a surf lifeguard — the only three tests he’s ever taken. He’s also started a few side hustles and learned skills like audio and video editing, blogging, and construction. He still doesn’t know what he wants to do (besides travel) for his career. And that’s okay with me.

First, I’m not against college. College is a fine place for young people to grow and learn and build important networks of friends and colleagues.  Yet, because the cost has gotten so out of hand for 4-year degrees, it’s simply a matter of doing a cost-benefit analysis (systematic process for calculating and comparing benefits and costs of a decision) based on the needs and desires of each individual student. Applying to college is only one way for teens to learn and grow after high school. Yet, in the current environment, some alternatives to college may be more fruitful.

Author and businessman James Altucher has been an outspoken advocate for skipping college. He’s even bribed his children not to go, to no avail. But he’s become a leading voice of why college is not necessary for success and what alternatives may be more valuable to pursue. Watch the video below for a quick overview of his take on college:

Altucher’s basic argument is that the cost of college has gone up much faster than inflation and that college debt levels now amount to years of indentured servitude for young people. He claims there are better, cheaper ways for young people to gain skills and knowledge and find success in the economy rather than starting off with a degree and debt. Additionally, he says that even if people still choose to go to college after a couple of years exploring alternatives, they’ll have a much better appreciation for the value of money and debt. So there is little downside for teens to broaden their horizons before getting into student debt.

Cost-Benefit Analysis

The average cost of college plus living expenses is over $20,000 per year. Here are the average tuition costs followed by the average cost of room and board for college students.

And according to College Data the cost for room and board is over $10,000 per year:

The College Board reports that the average cost of room and board in 2017–2018 ranged from $10,800 at four-year public schools to $12,210 at private schools.

This $20,000 can be spent doing something else. By starting a job or a business, young people can turn that annual expense into income, all while learning priceless skills and developing an understanding of the value of money.

Here are just a four alternatives to college worth exploring. Their potential rewards may exceed the benefits of a college degree.

Launch a Project 

Take a year off from school after high school to work on a project. Do something awesome! It doesn’t have to be a formal business or a charity. Simply set a goal for yourself and set out to accomplish it. It can be to master something like chess, poker or a video game. It could be to kayak the Great Lakes or hike the Appalachian Trail. It could be to set up a better recycling center for your community or start a community garden. Do something that excites you. You could make a movie, launch a podcast, or start a blog to document and support your project.

A year into the project, your stack of new skills and lessons will become apparent. Goal setting, time management, planning, budgeting, communication, and a host of technical skills will be acquired along the way.  And your project will likely cost less than a year of private college. If given the opportunity, what type of project would you do?

Cost-Benefit: Cost is less than college. Benefits appear greater than one year of prerequisite classes.

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Slow Travel

Altucher writes this about travel as an alternative to college:

Here’s a basic assignment. Take $10,000 and get yourself to India. Check out a world completely different from our own. Do it for a year.

You will meet other foreigners traveling. You will learn what poverty is. You will learn the value of how to stretch a dollar. You will often be in situations where you need to learn how to survive despite the odds being against you.

If you’re going to throw up you might as well do it from dysentery than from drinking too much at a frat party. You will learn a little bit more about eastern religions compared with the western religions you grew up with. You will learn you aren’t the center of the universe. Knock yourself out.

We can personally attest that slow-traveling in foreign countries has made our son a much richer person with no debt attached. Young travelers will definitely learn adulting, and they may even learn a second language and skills along the way. It’s hard to not learn those things when you’re thrust into that situation.

Cost-Benefit: Costs same as college. Benefits are definitely greater than English Literature and Calculus.

Start a Business

Teenagers can learn much more about economics, savings, accounting, marketing, management, government and a host of other skills by starting a small business than they will ever learn in a classroom. Ask any entrepreneur with a college degree. They will tell you they learned more in the first six months of building a business than all of their formal schooling combined.

My son started his first small business when he was sixteen. He wanted to save money for a world-schooling retreat. Instead of getting a part-time job, we agreed to help him launch a private label product on Amazon. He had to pick a product, get samples from factories, make adjustments, register a UPC, get logos made on Fiverr, design packaging, take product photos, create an Amazon listing, and arrange shipping. He also had to do the marketing and accounting. Not only did it pay for his retreat, he also bought a car from his earnings.

Cost-Benefit: Net gain in money versus cost of college.  Benefits are hardly measurable.

Volunteer

Volunteering for charities, public projects or businesses is a powerful vehicle for networking. It also teaches all of the valuable skills associated with the activity.

Altucher asks, “What is going to serve you better in life: taking French Literature 101 or spending a year delivering meals to senior citizens with Alzheimer’s, or curing malaria in Africa?”

Besides volunteering for charities, you could volunteer through programs like Praxis that connects young people with internships and apprenticeships with exciting startups and entrepreneurs at temporary placements. This form of volunteering at sprouting businesses is on-the-job training that may be better at opening professional doors than college.

Cost-Benefit: Cheaper than college. Benefits are at least equal to a freshman year of university.

It should be noted that no matter what high school graduates decide to do, college always remains an option. In other words, just because they explore one of the alternatives above doesn’t mean they can’t attend college if achieving their goals requires it.

Ultimately, we live in incredible times where valuable knowledge and experiences can be gained in a variety of ways. College is not the only path to a successful life. In fact, sky-high costs may make college a less reliable path to financial success as skills become more coveted than degrees. It may be time to start paying more respect to the alternatives to college.

Jeff Paul is the editor for Counter Markets and Coinivore.


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7 Comments on "Is College Worth The Cost?"

  1. We’re doing something very similar with our kids by choosing to work overseas. We’ve found living and working in a foreign country is totally different than vacationing there. Our son, for example, has picked up a second language, learned piano (largely online), and is now performing in live events. Wherever we go, we pair him with local pros in their respective area, with the stated purpose of increasing his marketability and self-reliance. We’ve been told he already knows more than many students who have attended conservatory for 10 years or more- not because he’s a prodigy, but simply because he’s been exposed to the information sooner. He is perfecting skills and business acumen which will pay benefits the rest of his life, no matter where he goes. All at the ripe old age of 13.

  2. When I entered the Engineering Field in 1973, there was a glut of college graduates who had stayed in college to maintain their selective service draft deferment. In my case, both the Vietnam War and the Draft had ended my senior year in High School. I had just completed 2-years in an Electronics Vocational Tech Program, and I had one year of manual drafting (CAD wasn’t available, yet).

    We have come full circle in the last 45-years, and now there is another glut of College Graduates within a specialized technology market. Just being an engineer isn’t enough… you are now expected to produce the work, which 40-years ago required 3-employees: CAD operator, Designer Technician, and Project Engineering Manager. Nowadays, some Global employers are also expecting you to be bilingual.

    If you really want to earn a college degree, you may want to consider going part-time to night school and letting your employer reimburse your tuition costs.

    • There was a time when you could get an engineering degree by going to night school. Those days are long gone. The schools have sprung the trap, and now no one can escape except by not going entirely. Night classes for engineering are few and far between, and they make sure you HAVE to quit work and go to day school to finish your degree. If you already have a degree it’s a different story. They fall all over themselves to offer MBA graduate programs(I’m sure you’ve seen the TV ads), but engineering? NO. This is compounded by companies that turn away CAD people who can do the work for those who have the sheepskin, and therefore have been “cleared” by the gatekeepers.

      • As the costs of attending college full-time become cost prohibitive, these learning institutions will have to expand their night classes and/or online courses to remain in operation.

        I can’t speak for other employers, but most of the courses I and others at work will take, are for continuing education [E.g. Industrial Classification codes; EPA Regulations; International Business Law] . Especially at my age, I am not looking for further accreditation.

        IMHO, I also feel you can learn more on-the-job, than you can from a college text book. College degrees are becoming unnecessary, and when they cannot keep-up with the pace of technology, these prestigious institutions will become obsolete.

        BTW: I have noticed the slim pickings of Engineering CAD courses, which are generally reserved for full-time students. I started with Bentley MicroStation in 1987, and have been using the AutoDesk AutoCAD Suite since 2010 (all my training was on the job). You would almost have to attend a college in order to afford the software, if your employer did not offer it.

  3. “Indeed, median annual earnings for full-time working 25- to 32-year-olds with bachelor’s degrees grew by nearly $6,700 to $45,500 from 1965 to 2013. During that same time, median annual earnings for high school graduates in that same age group fell by nearly $3,400 to $28,000.Feb 11, 2014” mic drop

  4. semper veritas | February 15, 2018 at 2:03 pm | Reply

    Don’t forget the trades. Just the other day, a fan went out on my air conditioner. It cost $350 to get it replaced with a new one. I don’t know what the cost of the fan was, but if it was $100 he made $250 for maybe 30 minutes of work. If the fan cost him a whopping $200, he still made $150. He told me he had several more that same day. It doesn’t take any sort of sophisticated math to see there is damn good money in the trades. A few months ago, I needed a plumber to change out a hot water heater. He told me they have a hard time getting young people into the business. When he would say to them, we need to go outside a dig a ditch, they would bail. Too many young people want to sit behind a computer watching porn and expect that they are going to get paid for it.

    Damn right the costs have gone out of site. Granted I graduated from a state university over 50 years ago when a degree really was a ticket to the gravy train. The tuition was $330 my last year. That same school now charges an in-state student over $13,000. Adjusting for inflation, in present-day dollars I was paying about $2,500. So the cost has gone up over 5 times, while many people who graduate now will not be able to find a job, they were lined up to hire us.

    There are numerous causes for this, but two are student loans that are easy to get, but hard to pay back. And the silly notion that everyone should be able to go to college. There are many people who are not suited for the academic rigors of college or what college should be. Back then there were not remedial courses for incoming students. You were either prepared or you flunked out.

  5. Go see what ‘college grads’ are doing and where they are working. Usually retail! I know many who ended up as pizza delivery drivers, hotel workers and working at low wage factory jobs and retail. This is POST degree. I tried getting an entry level job at my alma mater years after graduation, all I could get was a secretary 1 position, which paid minimum wage. These universities do not value their OWN degree programs! College is a huge waste of time and money. Go and read books at a library and do what the author of this piece suggests.

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