Is College Overrated?

Al Jacobs

Alyssa Mitan, a self-described millennial student at Murray State University, Paducah, Kentucky, drafted a challenging article titled “Is College Overrated?” I can’t resist replying. My scholastic background includes four university degrees, numerous certificates from educational institutions, and countless courses taken in colleges across the nation over a half century. In addition, I devoted ten years of my life teaching chemistry in a community college.

If there’s a single endeavor I’ve pursued during my lifetime, it’s one of higher education … and at no time did I ever even slightly suspect such schooling to be less than the most valued accomplishment a person can attain.

However, I’ve now begun to view how education impacts the lives of persons other than myself. I recognize my generation profited from generous benefits no longer existing. Here in California during the late 1940s, the annual cost to attend junior college, for a full 15 units, amounted to $6.50 – this fee entitled you to free medical services if you needed them.

Though I didn’t later attend Cal State University, I recall there being no charge whatever. As for the UC system, I’m told the cost was minimal. And as for textbooks, I still have a few of them. I see here a used one I purchased at the Los Angeles Associated Students store, dated Oct. 12, 1948, for $4.75.

It’s a different story for students today. The average cost for in-state public university students is $18,000 per year. For out-of-state students attending a public college it increases to $29,000. For private universities, the average outlay escalates to $37,000.

Admittedly, a lot of these schools will include some type of grant and/or scholarship program to reduce costs, but most certainly not to eliminate them. And you must be aware the average tuition continues to increase by about 5% per year. All I’ll say about the growing price is, for most students it’s a lot of money.

We cannot conclude our discussion on the expense of college without addressing a related reality. As most students – as well as the parents of these students – are unable to foot the bill while they’re attending school, another method of payment must be resorted to. And the route most chosen is the U.S. Department of Education’s federal student loan program. If, for example, it’s necessary to finance four years of schooling at $30,000 per year, the student’s final tab upon graduation will be $120,000.

This pretty well explains why the current outstanding balance on all student loans now totals $1.6 trillion … yes, trillion, with a capital T. When it comes to huge sums owed, only the nation’s unpaid mortgage loan amount exceeds this figure.

What many people fail to recognize is the hardship imposed by debt immediately following college and how difficult it becomes. Imagine your first job after graduating, earning about $40,000 a year. Although you subsist, after a fashion, you begin to get bills of several hundred dollars each month from a student loan company. What you discover is only a small fraction is actually paying off loan principal. Sadly, most is going to interest.

What you once paid on your credit card no longer covers since you left school; somehow that check isn’t meeting all the bills each month. You‘re also making certain your rent, utilities, electric, and water bills are paid – for far be it you must live without cable TV and high-speed Internet … also don’t ignore the payment on your new car – and your fiancée is nagging you about finding a home for the two of you while you’re still making monthly payments to pay off her ring. What many college graduates discover, often too late, is not a pretty picture once all the pieces are put together, for you’ll be amazed at how profoundly school debt affects you.

While attending college there’s another factor the student must consider. It’s referred to as the lost working years. There’s a famous study comparing the earnings of college graduates to those of high school graduates, but it fails to count any work done by either group from the ages of 18 through 22. The question to be asked is: What is the high school grad doing during this period which the college grad is not doing? The answer is obvious; he or she is working full time.

Never underestimate the importance of work experience. While the collegiate is getting a management degree, the freshly minted high schooler becomes an assistant manager and thrives for two years before making manager. When the two of them later apply for the same job, the supervisor making the choice must determine which of the two is the more ready to fill the job. Will it be the applicant with a piece of paper testifying to a management degree, or the person who already acquired 2-3 years of management experience?

And to add to the disparity, while one of them is racking up debt at college, the other is making money and, if smart, investing it in a Roth IRA. That four year advantage is going to turn into a new car, possibly buying a home … and if the high school graduate is truly smart, $4,000 or $5,000 a year going into a retirement fund. The only thing many college graduates have after graduation is debt … as well as a much later start on a new car, a home, and a retirement fund.

There’s another circumstance you can’t ignore. One of the worst things that can happen to a young student is borrowing money on one or more student loans but failing to get a degree. Not only does this seriously jeopardize the student’s future, it takes away any advantage likely gotten by going to work earlier as well as avoiding the borrowing.

It’s true, of course, most aspiring students declare they’ll not be one of those who drop out. However, statistics show almost 50% of all students who start never manage to graduate with their degree. So, until the system is fixed in a way which causes colleges to be as worried about graduating their students as they are in merely extracting money from them, there’ll be no improvements.

We’ve now reached the point where an important question must be asked: Why do people go to college? We assume one of the reasons is to learn, and there’s nothing wrong with this. In fact, learning for the sake of learning is a noble and commendable pursuit. But why must we go to college to learn? Aspiring to be a lawyer, a doctor, or a professor, is one thing, but it takes nothing but a library card to get a hold of the same books as people who attend college.

And anyone able to use the Internet can study subjects such as website design, computer programming, or whatever they choose.  Programming, much like the Rosetta Stone Software, makes mastery of a foreign language easier than ever … and all this learning takes place at a fraction of the cost. Obviously, employers will see you’re without a college degree, but if you can speak a foreign language fluently or have superior computer skills, why wouldn’t you be hired in preference to someone who merely holds an academic document?

I now want to make two things clear: I’m not opposed to learning, nor am I against the college experience. But with this said, I believe college is overrated in the way it’s promoted to high school students and to their parents. To suggest to an ecology major, for example, they’ll earn hundreds of thousands more over a lifetime than will a factory worker is, without a doubt, an outright falsehood.

And equally repugnant is the practice of encouraging science and engineering majors by extolling the anticipated incomes such graduates may expect to receive, without stressing the reality few students possess the academic acumen to successfully major in these subjects.

A final thought: Do many entering freshmen have a justifiable reason to be in a university? Be aware, only 19% manage to graduate within four years. In 1900, a little over a century ago, slightly more than 3 persons per thousand sought higher education. Today it’s over 62 per thousand. Of ever greater significance, 32% of Americans 25 and over possess a bachelor’s degree or above. And the degrees awarded: Green Living, Jazz Dancing, Gender and Popular Culture, Arts in Childhood.

I contend none of these for-credit courses require more than a fourth-grade mentality, yet all lead to a degree of some sort. When every citizen can obtain a bachelor of arts diploma, regardless of mental capability, the sheepskin awarded becomes little more than a token offering for having attended. I’ll leave it to you to decide whether college is overrated.

Al Jacobs, a professional investor for nearly a half-century, issues weekly financial articles in which he shares his financial knowledge and experience. Al can be contacted at


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