The High Cost of College: Is it Worth It?
20 million: number of student in U.S. enrolled in colleges, 2013.
Under 3 million: number of students in U.S. enrolled in 1953
$800,000: difference in lifetime earnings between college graduates and high school graduates. [Some say it’s more than $1 million]
3.6: percentage of unemployed college graduates in 2013.
7.5: percentage of unemployed high school graduates, 2013
Economic woes: In 2012, 1 in 3 college graduates had to take a job that required a high school diploma or less, including:
• more than 16,000 parking lot attendants,
• 83,000 bartenders, and
• 115,000 janitors
81: percentage of adults who thought college was a worthwhile investment in 1980.
57%: of adults who think college is a worthwhile investment, 2013.
Why is college so expensive? :
• Some families will pay anything to send their kids to college.
• Many colleges will try to get as much money as they can.
• Three, the federal government endlessly subsidizes the increases in college and higher education. And so the price keeps getting higher.
• There’s an academic arms race.
Is a four-year degree needed to succeed? :
• No. By the year 2018 there will be 14 million jobs available, well-paying jobs, which will require more than a high school diploma but less than a college diploma.
• Right now, a graduate of a community college, which is a two-year college, on average, makes more than a graduate of a four-year college.
What are some alternatives to going to a four-year college?
• Community college
• trade school
• Work for a year and think about it is another alternative.
• Join the military where you earn great trade skills.
• There are 115,000 janitors in America with B.A.s. It’s fine to be a janitor, but you didn’t have to spend that kind of money to be a janitor.
4 year college cost…and debt [average cost for a 4 year college and the average debt after graduation from a 4 year college] :
2003-04: $68.764, debt: $17,560
2004-05: $73,004, debt $18,221
2005-06: $77,312, $19,351
2006-07: $92,728, $20,300
2008-09: $103,032, $22,526
2009-2010: $107,632, $23,540
Earnings and unemployment rates
Doctoral degree: 2.5% unemployment rate, $1,624 median weekly earnings
Professional degree: 2.1%, $1,735
Master’s Degree: 3.5%, $1,300
Bachelor’s Degree: 4.5%, $1,066
Associate’s Degree: 6.2%, $785
Some college, no degree: 7.7%, $727
High school diploma: 8.3%, $652
Less than a high school diploma: 12.4%, $471
WOW: 19% of college presidents say they believe that the U.S. system of higher education is the best in the world. And just 7% say they think it will be the best in the world 10 years from now.
Pros and Cons: College costs. Is the ROI worth it? :
• Four years out of the workforce
• Student debt
• Your major may not be your career
• Higher earnings
• More options
• Edge in the job market
Successful businessmen without college degrees:
• David Geffen, billionaire founder of Geffen Records and co-founder of DreamWorks. Dropped out of college after one year.
• David Karp, founder of Tumblr. Dropped out of school at 15, then homeschooled. Did not attend college.
• Dustin Moskovitz, multi-millionaire co-founder of Facebook. Harvard dropout.
• Jerry Yang, co-founder of Yahoo! Dropped out of PhD program.
• Kevin Rose, founder of Digg.com. Dropped out of college during his second year.
• Larry Ellison, billionaire co-founder of Oracle software company. Dropped out of two different colleges.
• Simon Cowell, TV producer, music judge, American Idol, The X Factor, and Britain’s Got Talent. High school dropout.
• Rachael Ray, Food Network cooking show star, food industry entrepreneur, with no formal culinary arts training. Never attended college.
• Richard DeVos, co-founder of Amway. Served in the Army and did not attend college.
• Sean John Combs, entertainer, producer, fashion designer, and entrepreneur. Never finished college.
Successful businessmen with MBAs:
• Michael Bloomberg – The great profits of Bloomberg’s financial data and media company.
• Lee Shau Kee – Originally following the footsteps of his father in gold and currency trading, Kee later moved into real estate, founding a business with seven partners.
• Mukesh Ambani – Controls 45% of Reliance Industries – operator of the world’s largest oil refinery.
• Jorge Paulo Lemann – Lemann originally did poorly at Harvard, only to return to business school and graduate quickly.
• Thomas & Raymond Kwok (& family) – After the Kwok brothers were arrested on bribery charges last year, the scandal caused their stocks to plummet. However, their stocks have since recovered.
• Luis Sarmiento – He controls more than a quarter of Colombia’s financial industry
• Forrest Mars, Jr. – The Mars family have found sweet success through Mars, the world’s largest confectionery company.
• Phil Knight – Athletic company, Nike’s, “Just Do It” is one of the most recognizable advertising slogans ever made. Knight began selling shoes out of his car during track meets.
• Len Blavatnik – His investments have ranged across completely different industries, including music, oil, chemicals, and fashion.
• Ernesto Bertarelli – CEO of Ares-Serono in 199..
Bureau of Labor Statistics, 2012
Project on Student Debt, “State by State Data,” www.projectonstudentdebt.org (accessed Oct. 14, 2013)