Going to college is so universally viewed as such a great investment that the cost and its return on investment get virtually no scrutiny.  A typical statistic cited is “the expected life time earnings of a bachelor's college graduate are $2.1 million and the expected lifetime earnings of a high-school (only) graduate are $1.2 million (Day and Newburger, 2002)”.  This statistic, while impressive, ignores many other factors.  Remember that Bill Gates, Steven Jobs, Michael Dell and Larry Ellison never graduated from college.  And that was before subsidized student loans drove the cost of college through the roof.  When you borrow huge sums to finance a “silly” major, you are digging a big hole what will take years to fill.

Paying too much for a silly degree (Sociology, Feminist Studies, Medieval History to name a few) - particularly when borrowing to foot the bill is absurd.  You are highly unlikely to earn $2.1 million in a Feminist Studies career unless you marry a rich guy.  Saying all investments in college education are sound is akin to saying that buying stock in any company is a great investment.  If you do not intend to study anything practical, then pursue alternatives to the traditional four year college degree program (volunteer work, start a business, medical technician, military). 

If you are going to follow your impractical dream then part of the training needs to be in cost-cutting.  Begin today.  Do not borrow money for easy living today because that will certainly not prepare you for your life of poverty tomorrow.

Remember, you do not need to give up a passion in order to be realistic.  There are many, many successful engineers, physicians, and accountants out there who sing in amateur rock and roll bands, who take art appreciation courses, and who spend their vacations on volunteer architectural digs.  They make these passions their avocations rather than failed vocations.

The major you complete is far more important than which college you attend.  And we think that the college tuitions at some of the most expensive private colleges in the country exceeding $37,000 per year are a terrible value compared to your state college (sometimes with tuitions of less than $4,000 per year).  Combining an impractical degree at an expensive college is about as foolish as it gets.  According to a 2002 study by Stacy Dale, a researcher at Mathematica Policy Research in Princeton, N.J., and Alan Krueger, a Princeton economics and public affairs professor: “It turns out that where students go as undergraduates doesn't help them earn more money over their lifetimes.” Their study looked at 14,238 full-time workers who were freshmen in 1976.  The ones who were bright enough to get into the highest-ranked—but usually expensive-schools but then attended less expensive schools, did just as well in their careers as the students who attended the more expensive schools.

The cost of attending college continues to rise faster than inflation.  The overall inflation rate in the US from 1986 - 2007 increased 92.32%.  But during the same time, tuition at US colleges increased 343.81% (www.InflationData.com).  If this trend continus and the cost of George Washington University (four year tuition of $151,280) goes up an additional 343.81% during the next 21 years it will then cost $671,396.  And if the average price of a new car (today about $28,000) continues to increase at the general rate of inflation (92.32% during the same period) an average new car will cost $53,850 in 21 years.  So today's George Washington tuition bill is equivalent to the cost of 5.4 average new cars.  And in 21 years it will cost the same as about 12.5 average new cars.

We need our colleges and universities to reduce the cost of education - this does not mean subsidize it more.  It means get more efficient like the rest of the country - provide a better education for a lot less money.  But the objective of many colleges is simply to be the “best” college they can be - regardless of cost.  And the major objective of tenured professors at many universities is to do research rather than teach.  The institutions have gotten away with murder because of the public's pride in our college system and the wide availability of student loans reduces cost pressure on its customers (the students).  In a less subsidized market their customers would consider price as a much larger factor in shopping around for the best college investment.

So if you are considering an investment in college first and foremost spend time considering if college is the right choice for you and it is the right time - there are plenty of alternatives.  If college is right for you then select a practical major that will afford you plenty of job opportunities and choices upon graduation.  And finally based on your selected major choose your college frugally.  If it makes you stand up a little straighter then apply and get accepted to the prestigious school but then attend the one that is a better value. 

Author:
John Sherriff
President of ValueofCollege.com.

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