College: Investment Or Rip-Off?

Is college education in the US a rip-off?I was just reading an article by Brett Arends over on Marketwatch: obviously he wanted to ruffle some feathers, but he does raise some interesting points. Is college education in the United States really one big scam?

Have you ever heard of the College-Industrial Complex?
If you haven’t, you’re not alone. Brett describes it as the biggest, the most powerful; the most insidious conspiracy in all of U.S. History. It has to do with all that money you’ve been paying into your college education (and it’s no small amount!). For some people, this investment can be as high as $40,000 or more per year!

Is it worth it? Many people think that all of this money is a good investment into their future. They see no other option. After all, if you want to do more than flip burgers for the rest of your life, you need to pay out big bucks to learn skills that you hope will lead to you getting a better paying job.

Yet, is college really an investment in your future or just one gigantic rip-off? Let’s take a look at the numbers.

The Rising Cost Of College Tuition
That money you paid to get a degree? Well, it’s three times the cost someone who graduated 30 years ago paid for their degree, and that’s converting 1983 dollars to 2013 dollars. To make matters worse, even though you’ve just paid three times as much for that coveted degree, you haven’t received a better quality education.

In 1983, you would have been able to get a bachelor’s-degree-level education for an annual fee of $11,000 at a typical private American university (on average). The average investment a student makes today for the same education at a private university is $29,000 not including room and board.

At a public university in 1983, for $8,800 you would have been able to get a 4 year degree. Nowadays you pay that much for just one year of tuition.

The education methods haven’t changed THAT much. Even professor’s salaries haven’t increased so much to justify such an increase in tuition. So where’s all the money going? No one seems to have a concrete answer. Brett calls it a conspiracy – you can read his views on it here.

Philip

5 Comments

  1. I think Arends makes some good points in his article. What I think is helping to fuel this are companies who insist you have a college degree before they’ll even consider you for employment. This make an college degree a high priced commodity and increases demand for it. Those that profit from college educations can then jack up the price. Free market and all, right? It’s the American way. But I happen to believe there is more benefit in many careers with on-the-job training and experience than a college degree. Who is more valuable to company really – someone who had already worked in the field and knows the job or someone out of college with a degree but no practical experience? If you pick the latter, you lose!

  2. I forget which talk of his it was in, but Warren Buffet said that when it comes to college you should narrow it down to to categories of choice. The first would be to save your money for more meaningful ventures, and go to the cheapest community college you can find. In that case, you’re really going for the degree of completion, and nothing else. Just get your degree and get out, hopefully with as little expense as possible.

    The second option is to go to a top 10, or preferable top 5, school. The name of the college and the caliber of the professionals that teach there will provide so many opportunities you’ll probably be very well employed before you graduate. Yes, the price tag is daunting, but for the tip top schools the income potential is worth it. The debt won’t matter, if you can get in.

    Don’t bother with anything in between. Most schools are vastly overrated, and you’ll be looking at debts of 40-60k a year while still making the same money as people who went to state schools and spent 20k or less a year. It’s a bad value. You could have spent 20k more, and be turning away jobs that would pay off your debt in a few years.

  3. I completely agree with both of you. I find it much more practical, if you are interested in a particular field, to go get involved in that field by working in it and getting first hand experience. Degrees just aren’t worth as much as they use to be, so if you absolutely need one, I see it much smarter to go the cheapest method possible, as the education and certification is the same in the end.

  4. I have heard about how much college costs in America and it’s unbelievable! I understand that some jobs are worth it, but nothing is guaranteed in life anymore. Let me just tell you, college in Europe costs a lot less! For a mere $2,000 you can get the same college education as people get in America. So, isn’t it more convenient to go abroad, study, then come back?

    • I doubt that a non-citizen would pay the same fees as a citizen. I know it’s becoming more and more common for people to study outside of their home country though. That $2000 figure is amazingly low, it makes it very affordable for virtually anyone to get a college education!

Comments are closed.