Is College Worth The Money?

I was perusing Millionaire Mommy Next Door's blog (who wouldn't? I want to be a millionaire mommy too) when I saw a link to this article, entitled Is college worth the money? As someone with $49,000 of student loans still to pay, I couldn't resist. Here's what it said:

If you check the College Board's Web site (.pdf file), you'll find a reassuring study indicating that education really does pay. Without considering the intangibles, the study says each additional level of education draws a higher lifetime income. While the median high school graduate age 25 and older earns $26,300, the median college graduate age 25 and older earns $42,200. That's an annual income premium of $15,500, or 59%.

Well, maybe not.

According to the College Board, it takes 14 long years before the four-year college grad's income, net of loan payments, starts to beat what the high school grad earns. During all those 14 years, college doesn't pay. High school pays.

. . .

If college pays for the median-income worker, it may not pay as well for graduates who aren't so fortunate. Worse, if you earn less than the median, the burden of your college loans will weigh very heavily. They could, in fact, exceed your earnings gain.

Bottom line: College, particularly an expensive private college, is a high-risk investment, which, for many, won't pay.

I have to agree. I went to an expensive private college, expecting to make a lot of money when I graduated, but that wasn't the case. Not only did the private college not give me an edge -- you'd be surprised the number of "alums" from state colleges and universities that would prefer to hire their own rather than someone from a "fancy" private school -- a lot of times it actually made it more difficult to get a job because the school was small. Imagine my surprise when, five years after graduating and paying $80,000 to go to an "excellent" private school on the West Coast, someone on the East Coast asked me if the school was accredited? I nearly had a heart attack. If I had gone to Washington State University, on the other hand, I could have paid 75% less for tuition and the name recognition of the school would follow me anywhere in the U.S. -- no questions of "accreditation" required.

My alumni association constantly presses me to encourage teens to apply for the school, but I simply cannot in good faith do it. I loved my school, it was a great experience, but financially it was disastrous for me. I will soon attend my 10-year college reunion without a lot to show for the education I received.

As for my kids, I plan to send them to a state university, at least for two years. If they have the scholarships and want to get that private school diploma, they can go for the last two years.

After all, education is only as good as it frees you to do better and more interesting work; a high debt-load, even with student loans, is nothing but a different set of chains.