College a waste of time and money?

The more I talk to people -- those of us who are college grads -- the less value our degrees seem to hold over time. None of us are lawyers or doctors, so I don't offer this as anything other than a very unscientific sampling. Besides, I guess there are fields where college in essential.

But, on the other hand, I see can see where college could be a huge waste of time and money. The fact is, you don't need college to become an educated person. That's a process that should be started in childhood and last your entire life.

James Altucher recently wrote in passing that he never had any intention of sending his kids to college. He received lots of emails asking him if he meant that. Answer? He was "dead serious."

In his latest Financial Times column, he answers what's wrong with college:

First, and foremost, it's too expensive. To send a kid to college you need from $200,000 to $400,000. That's insane. There's no way the incremental advantage they get from having a diploma will ever pay back that amount. Perhaps for the first time the opportunity cost (a phrase I remember from Economics 101) of college does not equal the extra profits generated by the degree.

Second, I don't believe in a balanced education. Most colleges require students to take a smattering of art, maths, sciences and so forth. Taking 10 courses a year on wildly different topics, with enormous homework responsibilities, not to mention droning, boring professors for at least eight of the 10, is the surest formula for creating complete non-interest and inability to remember anything in any of the topics covered. What a waste of $400,000.

He then lists a third item -- better things kids can do with their time. These include working Internet content-type jobs, starting a business, devoting at least one year trying to master something. He goes into each of these in greater detail.

James' weekly FT columns are quickly becoming must-reading. He's really been on fire lately.

Comments

[Bill aka NO DooDahs!]

Aside from the fact that James seems unable to obtain quotes from any but the most prestigious schools - $400K? Who is he kidding? - the man's got a point. College was a waste of time.

http://www.billakanodoodahs.com/2007/05/questions-for-the-new-graduate/

The point is not "are you better off" but "what alternatives to college would have been EVEN BETTER," i.e., applying the parable of the broken window to the choice of college/no college.

[Trey F.]

This article caught my eye because, it is so TRUE!! I have a BA and an MBA. How much do you think these degrees helped me when my previous employers closed down to go overseas or give their business to a 3PL. Not one damn bit! Pissed! You bet! I bought into the "more you learn, the more you earn" lie. I can't put my MBA down on some jobs because, I will be overqualified. That's a great feeling! To know that something you worked so hard for can hurt you! Also, the degree has been diminshed thanks to the "diploma mills". Thanks to Strayer and Univ. of Phoenix, there is a glut of MBA's. If your child has no interest in college, don't send them. Let them discover their gifts and talenets and then, they can go get the training they'll need.

[ltlmac41]

The only MBA's that can truly help are from the top 20-25 schools, after that you're spending too much money. As for college, mine wasn't 400K but it was some of the most fun I've had in my life, so many new experiences and so many ways to be forced to grow up.

[Thomas]

YAWGTGMITB (Yet Another Wild Generalization That Gets Mileage In The Blogosphere)

College doesn't need to cost $200-400K. Go to a good state school and study to be in the Top 5% and you'll still very well.

But as Bill pointed out, it's not about the cost of college it's about the cost compared to the next best alternative. If your kid can do self-directed study or has the chance to learn under a master, then that might be the right choice. However, if they're going to take their 18yo ass with no skills to McD's...guess what, college is a much better alternative.

Also, college isn't all about learning, it's also about socialization. Interacting with your peers and learning how to be social matters. Granted, while Google and the Dot Com 2.0's are doing well, it doesn't seem like this matters. When the crash comes, however, you're going to see a lot of geeks crying about their lack of employment because of inability to play nicely with others. Bubbles have a wonderful insular quality that unfortunately goes away when they're popped...

[Bill aka NO DooDahs!]

Ah, Thomas, YES!!!!!

The socialization that businesses find most useful!!!!!

The proven tolerance for boring, repetitive, mindless routine and the socialization to be in the appointed place at the appointed hour. Four years of which (oops! 5-6 years for most!) convinces most employers that you are suitable for their entry-level $20-$25K annual job ...

Lots of "social" and "peer interaction" at the HS level. Perhaps team participation in HS (JROTC? Band? B-Ball?) could count for college credit if it's really about playing well with others?

[James Altucher]

I don't understand. Can't people learn to socialize without college? So, if they get a job with people of all ages at the job, isn't that better for learning how to socialize than to be just in a community of people your exact age and income class?

[Sivaram Velauthapillai]

I'm in Canada, where the cost isn't as high so it's a bit different. I think if the cost is $300k to $400k, higher education is likely not worth it unless you are guaranteed a high-paying job. The cost of education is literally 10 years worth of after-tax income.

Bill has a very cynical view that actually sheds light on why one should seriously consider education. As he points out, the fact of the matter is that many employers, especially large corporations, filter candidates based on having a university degree. It almost doesn't even matter what degree in these cases. It depends on whether you want one of these jobs. Even a low-level desk job (which is what I have) would be hard to get if you didn't have a degree. For example, how many entry-level jobs at, say, banks require a degree? Practically all of them.

As long as employers use a degree to filter--even for entry-level desk jobs--there is some value in university.

Most here seem to be against general education but I actually think it's good. As educators have always maintained, they aren't teaching you anything specific; instead they are teaching you to learn on your own, interact wtih others, and learn tools, and so forth. General education may not help me get a job or get paid more but I think some of the general stuff will help me in my life more.

I think what is different now is that compensation between university and high school degrees is being compressed. So if anyone is looking to get paid a lot more by going to university, it probably isn't a good decision. There used to be a huge gap in pay between so-called white collar worker (eg. office desk job) and blue-colllar worker a few decades ago. Now, there is literally no difference. A factory worker gets paid as much as an office worker. So anyone considering a degree to increase their pay may be in for a dissapointment. The biggest compression in salaries is probably for those with an MBA (it is losing its value quickly)...

[Bill aka NO DooDahs!]

Sivaram, not the first time I've been called cynical.

:)

Obviously if one is after a job at Goldman or plans to be one of the "Who's Who" of world politics, there are very few choices and they all involve expensive degrees from prestigious places.

If one is desirous of a desk job with a major corporate employer, perhaps it's in one's interest to seek the cheapest and quickest route to a degree that one can find. Community college, [blank] State of Podunk, etc. Go for it!

The purpose of my post was to show that there are lots of routes to prosperity and gainful employment that don't involve college, or at least not a degree, and to assert that the value of a degree is overrated. I think I've accomplished that.

[BrighterSuns]

Sorry folks, you can talk about alternatives to education, but I work in financial services (and technology for financial services before that) and I will not hire you or your kids without a college degree. Also I would not have been hired in any job I had without it. At least you need to explain why you didn't go: "I needed to support my family, so couldn't afford it, but 6 months in a trade school got me a job" is acceptable. "I don't believe in the concept that I'd have to take Literature when I'm more of a science guy" is not. I agree that the quality of your education is critical, and socialization plays into that quality - hence the University of Phoenix MBAs get less credit in my book - but education is required. Mind you it doesn't guarantee success, just gets you in the door. Without it, enjoy your alternatives.

[Bill aka NO DooDahs!]

Yeah, we know that corporate financial services (and IT for them) are the be-all and end-all of gainful employment. Thanks.

Lots of alternatives. That's the point. Just because YOU don't see them, doesn't mean they aren't there ...

[barbsright]

This is the wrong question. The right one is: When is investing in a college degree not WORTH it?!!!! The answer is based on the costs (opportunity and others) of that degree; plus the personal enjoyment one gets out of the pursuit of said degree. From my observations a degree is only worth it if you graduate with little or no debt, and have very high grades. If you graduate with low to average grades in this economy you will just get the same job offers you would without a degree. I, and my friends, have experienced this firsthand. The most important rule is to avoid debt. The jobs out there make it hard, if not impossible, to pay back loans. Avoid debt at all costs!!!

[college is a joke]

"If you graduate with low to average grades in this economy you will just get the same job offers you would without a degree."

That makes no sense, your degree says nothing about what grades you got. Care to explain this further? I mean a degree just says how long you went to the school you graduated at. Not trying to be sarcastic or anything, I just really want to know what you meant. Anyone could say they were valedictorian or had a 4.3 GPA. From what I hear most people/companies don't bother to check that stuff.

[Joe]

I will not work at a company that filters people based on college degrees. Some of the most intelligent people do not finish college simply because it bores them (Steve Jobs, Bill Gates, etc...). If a company fails to look more deeply into potential hirers, then I see that company as narrow-minded and destined to fail.

[Jack Bell]

Colleges are business too. Why should people have to PAY FOR A JOB anyways? They just want your money, and believe me, loans aren't cool. A union job pays better and you don't start off 100 grand in the hole. Not everyone wants to be an office monkey anyways...

[Joan]

College is in part a response to the outlawing of IQ tests in Griggs Vs Duke Power Co. in 1971 by the US Supreme Court

[Rob]

College was the biggest waste of F#$king time in my life. All throughout high school we were told "if you want to get anywhere in life you have to go to college blaa blaa blaa.....", I was one of those people that bought into it. The only thing college got me was $11,000 debt in student loans. I ended up enlisting into the army (not a waste of time unlike college) for 4 years to pay off those loans. Now with the economy in a world of shit, I cant get a job anywhere in my line of work because of hireing freezes and lay offs. The hell of it is, you dont even need a degree in my line of work. If I could do it all over again, I wouldve went straight into the army after high school and skiped college all together. My saying is that "A college education costs alot, but it aint worth a damn". Biggest mistake of my F'ing life!

[Amilia]

I wish my parents had had this attitude when it was my time for college. I had absolutely no interest in going, or at least not right away. I really wanted to take a year off and figure out what I wanted to do and how to approach my goals. I had a certain idea of my long term goals but had no idea how to pursue them. I had some money saved from working throughout high school and was completely prepared to travel on my own dime. But that was out of the question. Everyone in my family goes to college, and it was not up for debate. Not to mention, I didn't even get to pick the college I went to. I applied to 3 schools, got into 2 of them, and preferred one very much over the other. But the other was in state, therefore less expensive, so my parents sent me there. Meanwhile, my sister got to go to a more expensive school, since it was ivy league..(Meanwhile, she's a teacher. She didn't need an ivy league education for that.) My rationale was that if my parents were forcing me to go to college, at least they should let me go to the one I preferred. Well, I ended up going. Let's just say it was one of the worst experiences of my life. I kept transferring to other schools, switched majors a million times, certain semesters my grades were below par (simply because I didn't care), and I was completely screwed up. And yes, I'm still paying off my debt from this time.
Finally several years later, I mustered up the courage to tell my parents off, and I moved to the city I've always wanted to live in and am pursuing my dreams. I'm already quite successful at what I do, but still have a little ways to go. I never graduated, and I don't really care to. I am educated, and frankly, I credit my education more to my life experiences than anything I ever learned in college. If I had only had the guts to stand up to my parents then, I probably would be much further along in my chosen career, because I would have moved to my current location at age 18-19 and begun then. And I'd like to add that I've held many jobs over the years to support myself, and at most of those jobs I worked with college grads. Yes, we had the same title and made the same amount of money. Their college degrees did not give them any advantage over me. I'm not saying that college is a terrible thing. I'm saying it's not the ONLY thing. And in some cases it is absolutely the wrong decision to make. You really have to ask yourself if it's for you. Are you going for the degree, the education, the status or what? Because if you are a determined and intelligent person, you can become educated without college by using your own resources and working hard (and you can save yourself a ton of money). If you're going for the degree, make sure it's a degree that you can use. And if you're going for the status, then that's the biggest mistake of all. College is so expensive nowadays, you have to understand that chances are you won't get return on your investment. You can save the money and use it in other ways that are more beneficial to you.
If any parents are reading this, please take my advice on this one. Don't force your kids to go to college if they don't want to go! They'll resent you for it. My parents and I are on good terms again, but it took a long time.
When I have children, I will talk about this thoroughly with them. If they really want to go, and their reasons are legitimate, then I will finance them. But I will not be one of those parents who forces it on them. I know better!