Is College Worth It?

by Krantcents · 37 comments

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Is college worth it?  You would expect a high return on investment (ROI), if you attended Harvard, Yale or MIT. Even if you received a degree from a no name university.  A lot of families are thinking about this question, whether you are a high school senior or just graduated.   Finding a job in this economy is tough and paying off student loans are tougher without a job.   Is college worth it?

College tuition has increased more than inflation in the last few years thanks to state budget shortfalls.  If you want to attend a private university, the cost is approaching the cost of a small home.  No doubt about it, a college education is expensive whether you go to a public or private university.  Has the value of a college degree changed in this economy?  A college degree is no guarantee of a job!  What does it take?  It is up to the individual to make their lives successful.

There are debates whether a college education is worthwhile, but what is a college education?  Is it supposed to prepare you for a specific career or job? Even college presidents do not agree about the purpose of a college education.  Roughly half feel it teaches work related skills and the rest say they help students grow personally and intellectually.  Which is it?  If your major was engineering, computer science or accounting, you learned work related skills.  Many other majors such as English, social sciences etc. helped you grow personally and intellectually.

As an investment, college has a return on investment (ROI) anywhere from four (4) percent to a high of thirteen (13) percent depending where you went to school.  You would expect a high ROI, if you attended Harvard, Yale or MIT.  What surprised me, although it shouldn’t, is the highest returns were from the highly ranked state universities such as Cal (Berkeley) and Michigan, but also lesser ranked schools such as College of William & Mary and Virginia Tech.  These are statistics were compiled (Businessweek) online based on a thirty (30) year return.  Does it make sense for you?

There is no way to verify the information provided and there is no information regarding their degrees or majors.  As far as averages go, a college education does increase your earning potential.  Emphasis is on your potential!  If we all entered a physical training program, I am sure that everyone’s results would be different.  Some people do not need formal training in order to succeed.  One example is my immigrant parents.  There are notable success stories of people dropping out of college and becoming very successful.  Bill Gates, Steve Jobs, Steve Wozniak and Larry Ellison are some of those famous drop outs.

If you think you can be one of those exceptions, college is a waste of time and money.  How do you know at eighteen (18) years old?  By the time you figure it out, you probably wasted a lot of time and money anyway.  Is everyone college material?  Of course not, but everyone needs more than secondary school in this changing world.  I think you should pursue a career that you have skills and knowledge.  It certainly should be something you enjoy and are good at it.  I cannot think of anything worse than spending thirty to forty years doing something you hate to do.

College or school in general is no different than a career.  You should pick a field of study you will enjoy and achieve good grades.  When you interview for any position, the employer will ask what was your grade point average (GPA).  It is a strong indication of your work habits, knowledge and skills.  College is also an opportunity for you to investigate all your career options such as internships, fellowships and part time employment.  All these experiences reflect on you as a student and ultimately an employee.

How do you choose a college or university that will help you succeed?  First you need to decide what career you wish to pursue and which university will help you reach that goal.  At eighteen (18) years old, you will probably change your mind a few times, but keep your options open.  If you have good grades in high school, you may get a full or partial scholarship.  Another choice is to go to community college for the first two (2) years to lower the cost of college and transfer to a state university.

Does it matter what your major is?  I have often heard people say why waste your money on a liberal arts degree.  John F Kennedy was a history major, Steve Jobs studied calligraphy, Sally Ride (Astronaut) was an English major and Jill Barad (Mattel CEO) was a English/Psychology major.  The new president of CNN is Jeff Zucker (history major)!  I have known many people who had liberal arts degrees who went on to run or start companies.  It is not the school or your degree that determines success, it is you!

Final Thoughts

Is college worth it?  Absolutely!  College helps to prepare you for success, but you have to do something with your education.  Success and the best return for your investment has very little to do which school you attend or what major you decide to pursue.  As a student, success is measured by your grades and what else you accomplished in college.  Going to a top ten public university is just as good as a top ten private university. Evaluate the university based on financial aid because the return on investment will probably be better with the less expensive choice.  In most cases, a college degree will yield an exceptional return (between 10=13%) in most cases.  I love to achieve that return with all my investments!   Is college worth it?

Photo by:   Will Folsom


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Holly@ClubThrifty December 11, 2012 at 4:16 am

I definitely think it’s worth it as long as someone doesn’t go into more debt than the degree itself is worth. Nowadays, some young people I know are starting at community college to save money. Then they are transferring to a bigger school to finish their degree.

Krantcents December 11, 2012 at 7:02 am

Although it is meant to save money , I do not see anything wrong with it. Most people ask where you received your degree not whether you spent 4 years there.

Money Beagle December 11, 2012 at 4:32 am

I think it is worth it for more people than not. In terms of getting buried with loans, my advice is always that if you have to take loans, do not take anything more than loans to cover the classes. Find a way to pay for room, board, and entertainment through other means. For the most part, if you can accomplish that, your loans will be manageable compared to those who fund every dime spent on anything for the duration that they’re in school.

Krantcents December 11, 2012 at 7:28 am

I agree that limiting your loans is a good idea. I think most students just accept what is offered vs. taking charge of your education.

Michelle December 11, 2012 at 6:21 am

I think it depends on the person. College was worthwhile to me, but for W it would not be. He is still successful too.

Krantcents December 11, 2012 at 7:29 am

College is not for everybody, but everyone needs some post secondary training.

Eric J. Nisall - DollarVersity December 11, 2012 at 6:25 am

The way I see it, college has 2 purposes. One is to provide advanced, specialized education beyond the generalities taught through high school. The second is helping to develop life skills and how to be part of a community. To me, the name on the school means more to the ego than it does to the value attached to the experience and benefit in most instances; going Ivy League doesn’t guarantee long-term success any more than a state school, except in the initial phases of post-graduate life when the prestige blinds people to the personal/professional shortfalls of an individual. That, and I find the whole GPA issue to be something of a false indicator as it only judges a person’s ability to test well, in many cases memorizing information, moreso than it indicates a person’s knowledge (some people just get nervous or stressed when testing). Overall, I would definitely suggest at the very least going to college, even for a year, just for the experience then judging whether or not it would be beneficial to continue on.

Krantcents December 11, 2012 at 7:37 am

Not everyone is college material nor should they be. They are many careers that do not require college and you can have a successful and fulfilling life. Education is supposed to prepare you by stimulating higher level thinking. One’s GPA is just one indication of success with the material you learn in school.

Grayson @ Debt Roundup December 11, 2012 at 6:46 am

I agree with Michelle on this one. You have to think about the industry that you want to go in. If you want to be an automotive technician, then many 4 year colleges will not be worth the money. You have to make sure you are going to a college that has the degree program that you want.

Krantcents December 11, 2012 at 7:44 am

I agree that the industry has some effect on what and where you may study. The entertainment industry is more open than others regarding whether you need a degree and what school you attend. Yet, to be a writer in the entertainment industry, there is a bias toward the ivy league. I think it is what you do with it that is important.

Lance @ Money Life and More December 11, 2012 at 7:17 am

College was totally worth it to me and has paid off already. I figure I would be lucky to have a job if I didn’t go to college, and I bet it wouldn’t pay nearly as much.

It makes sense to me that the state schools have higher ROIs because they likely cost much less.

Krantcents December 11, 2012 at 7:48 am

College is not for everyone, but those who go can see a nice return on their investment. The real value of college is not just defined in dollars and cents.

Kathleen, Frugal Portland December 11, 2012 at 9:10 am

College is worth it because it propels a person toward the middle class. Also it gives society a four-year break from having to deal with people who know everything.

Krantcents December 11, 2012 at 11:15 am

If it were only that easy! College prepares you for a lot of things, but it is up to the individual to do something with it.

Tackling Our Debt December 11, 2012 at 10:29 am

I believe college is worth it if you study a program that will help you find work that you enjoy, and will make a decent living with. A generic program may make you wiser, but will it pay the bills after graduation.

In high school we worked with guidance counsellors to help us decide what a good college program would be based on our interests, skills and job opportunities.

Krantcents December 11, 2012 at 11:18 am

All those liberal arts majors end up doing something! Many of them go into a training program. Unfortunately, most people spend very little time to figure out what they want to do as a career. It is up to each individual to figure that out.

AverageJoe December 11, 2012 at 11:29 am

This is an interesting problem. My twins are looking at completely different schools. Autumn is interested in Arkansas (they have a fine honors program) and my son Nick is interested in NYU. While I expect my daughter to receive a fine education, my son has the opportunity to make contacts and connections in Manhattan that are impossible in Fayetteville. However, NYU is roughly seven times more expensive. Will he get as high an ROI as my daughter? He may earn higher salaries, but at a huge cost. Is it worth it….indeed. The bajillion dollar question right now.

Krantcents December 11, 2012 at 12:14 pm

Years ago, my son was offered a scholarship to a top 10 small private college, but it was only $10K. At the same time, UCSB offered him a full scholarship. It was a no brainer!

John S @ Frugal Rules December 11, 2012 at 12:30 pm

I think it tends to depend on the person. We’ve gotten to the point that in many facets it’s expected that you go. I think the important thing is that the student make an informed decision in regards to cost, expected job possibilities, etc. Otherwise they can be opening themselves up to a pile of debt with possibly no direction after graduating. If after looking at it all they determine that it’s not for them then I think looking at finding a trade is the next thing that should be looked at.

Krantcents December 11, 2012 at 2:02 pm

Everyone needs post secondary training whether it is college or not. If you need to incur debt for college or some other training,it is important to take it seriously. If not, you are a fool!

Kim@Eyesonthedollar December 11, 2012 at 6:11 pm

College is worth it if you can use it to further yourself. Going to college just to go to college is not worth it at all. My husband went to college twice, once because it was the next step after high school, he promptly flunked out. The second time was many years later when, after several life experiences, he decided to become a teacher. It took a year at community college to erase the first year’s GPA. So wait until you have a plan, then it’s worthwhile.

Krantcents December 12, 2012 at 7:42 am

I am glad that he is pursuing his degree. The college decision is probably one of the biggest an 18 year old has to make (except for voting)! Some are not ready at 18 and that is okay.

Miss T @ Prairie Eco-Thrifter December 12, 2012 at 12:02 pm

College teaches you how to learn, how to write well, and how network. I think it is a good way to built those skills for life later. Even if you end up doing a different career, your baseline skills that you gain still translate.

Krantcents December 12, 2012 at 12:03 pm

I agree college is an investment in yourself and it is up to each individual to get the most out of it.

Squirrelers December 12, 2012 at 9:18 pm

College is worth it, and should really be a standard – just as high school was a generation or so ago. The world is getting more competitive, and there are millions of exceedingly talented people all over the world hungry to make money and succeed. The bar is raised, and people need to stop looking at college as some kind of totally optional venture. I know many would disagree with me, and that’s fine.

The one thing I think is vital is carefully evaluating which college makes sense for a person’s long-term success, and a return on investment mindset is important. The highest ranked and/or most expensive choice isn’t necessarily the best investment.

Krantcents December 13, 2012 at 7:00 am

I agree and there are many excellent state universities that are reasonable (comparatively).

Brent Pittman December 16, 2012 at 8:44 pm

I believe the traditional model of college is outdated and dying with the abundance of free information available. I believe a college degree could be worth it, but going to college without a plan (which is what most 18 yrs olds have) leads to debt and attaining an unmarketable degree.

Krantcents December 17, 2012 at 7:22 am

College is no different than any other long term project. You should start with what outcome is expected and work backwards. What is the degree or education supposed to achieve?

Lena @ WhatMommyDoes December 23, 2012 at 10:23 pm

College is absolutely worth it for most people unless they are not college material or can find something else they love to do (that someone will pay them to do) without having to get a college degree first.

These days, a high school education with no other training doesn’t give you a leg up. A college education, in some respects, is a rite of passage that shows prospective employers you are willing to commit to a program and put in some effort. Above all else, I believe it teaches you to be a critical thinker. Armed with critical thinking skills you can tackle most any problem that doesn’t require specialized knowledge, and that’s a good base level of competency an employer wants to see in a new hire. If you have a specialized degree in anything, even better!

Krantcents December 24, 2012 at 7:46 am

College is an investment in yourself! It is still up to the individual to use it effectively.

Rob @FinancialSprout January 5, 2013 at 11:45 am

In today’s day and age a bachelors degree is becoming the new high school diploma. Jobs are becoming more scarce for those without a degree; that alone makes college worth it. The cost however should be less of a worry for the determined individual, because there are so many scholarships out there. With scholarships you can go to college for virtually free! To me going to college is definitely worth it, especially if you can rack up the financial aid.

Krantcents January 5, 2013 at 12:57 pm

Of course, I agree with you! I was surprised with the return on investment percentages. It is still up to the individual to do something with their education or training.

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