Economics of College Degrees

SC&C Economics of CollegeIt costs more than $12,500 a year for tuition, room & board, and study materials, at a community level college. Private colleges can push that number over $35,000 per year. That means a bachelor’s degree (four years) will cost at least $50,000 and possibly over an eighth-of-a-million dollars, not including any extraneous funds spent for socializing and entertainment (no movies, no dating, and no beer).

The average student’s debt currently sits around $29,000, but amounts totaling $100,000 or more aren’t unheard of for many graduates. Larger amounts are relatively common for those attending high-prestige schools and obtaining advanced degrees.

Seven in 10 seniors (69%) who graduated from public and nonprofit colleges in 2014 had student loan debt with an average of $28,950 per borrower. Over the last decade—from 2004 to 2014—the share of graduates with debt rose modestly (from 65% to 69%) while average debt at graduation rose at more than twice the rate of inflation— Institute for College Access & Success

Is it worth it?


Earnings with College

A bachelor’s degree gets your foot in the door for a beginning job at $50,000 per year, which sounds nice. After several years, you should be able to get into the mid $80,000–$90,000 range. In 2016 dollars, after 15–20 years, you should (on average) expect to top out at $140,000 per year.

Earnings without College

If you’re willing to do some advanced training, say by attending a technical school, you can do surprisingly well. If you’re reasonably quick witted, and apply yourself, it should be fairly straightforward to earn $30,000 a year when you start out. If you are productive and clever, you should be looking at $48,000 to $52,000 within a few years. In 2016 dollars, after 15 years, you can typically expect to top out at $80,000.

What does it mean?

SC&C College debtAt $30,000 per year you will have four years of work experience, and earnings totaling $120,000. In the same period of time, someone pursuing a graduate degree has accumulated zero experience and somewhere between $50,000 and $140,000 in debt.

College can be even more stressful for those that don’t want to be chest-deep in bills when they finish their scholastic career. Those people take part-time jobs while they’re going to college. Their studying suffers, they are probably sleep-deprived, and ultimately, their grades aren’t as high.

In total, when they finish college they’re $120,000 behind their non-college counterparts, and have a significant debt to deal with, which will take between one and three years to pay off if they dedicate 100% of their salary to the task. Since that never happens, this debt is likely to stretch out for many years.

Usually this is about the time that debtors begin to think about what it would be like to live in Norway, Sweden, Finland, Denmark, Mexico, Brazil, Germany, or many other countries that offer free college to everyone!

Given two programmers, one [self-taught] with 3-4 years’ experience and the other with a bachelor’s degree and no experience, it’s actually the case that experience will trump education just about every time, especially on general programming positions and [particularly] in the startup community, where all that matters is what you can do and have already done—J. Faucett

What Can I Do without College?

Online Advertising Mngr. $88K | Web Developer $77K | Dental Hygienist $69K | Electrical technician $57K | Surveyor $56K | Wholesale Sales Rep $53K | Tax Collector/Examiner $50K | Steno/Court reporter $49K | Paralegal Assistant $48K | Insurance agent $48K | Architectural draftsman   $47K | Industrial machine repair $46K | Help Desk Analyst $46K | Hotel Manager $46K | Executive assistant  $45K | Heating/Refrig Mechanic $44K | Sewage Plant Operator $43K | Construction Equip. Op. $42K | Truck Driver $41K | Help Desk Attendant $38K | Medical secretary $33K | Teacher’s Aide $26K | Hair stylist $25K | Cosmetologist $25K

Alternate Options for Education

SC&C Earn Degree OnlineIf you decide to start your working career without a college degree and then find that your ambition suddenly requires an associate or bachelor’s degree, you don’t have to drop everything and go back to school per se. There are always alternatives, and they can be cost-free.

University of the People (UoPeople) was the world’s first accredited, tuition-free, online university. Their academic leadership comes from Harvard, Yale, Cambridge, Oxford, New York University, and many more.

edX, in cooperation with MIT, Harvard, Berkeley, Univ. of Texas, Univ. of British Columbia, and Columbia University offers an amazing number of certificate courses as well.

Coursera has relationships with 152 universities and colleges offering 1,769 courses, with over 17,000,000 current students.

If you have the time available, and the money to spend, there is no valid argument against attempting to earn a degree. If, on the other hand, you want to gain a lead on your peers, and enter the working world without a crushing debt, there are 24 interesting choices listed above. And there are plenty more.

More importantly, you can change your mind and work on obtaining a degree, for free, at your own pace, online. This is a very useful option once you have started your career and have money in the bank.

The whole concept of education has changed. Many premium institutions are looking to broaden the base of people with high-quality educations. Smarter people benefit the whole world because they are often less inclined to make ill-considered decisions.

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