Pay My Tuition!

bigdog posted on 11/02/11 at 09:23 AM




One thing we've been hearing and reading a lot about lately is the increased cost of college tuition, such as in this recent piece from the WSJ. Anyone who has seen the Occupy Wall Street protest news probably noticed a lot of the younger folks are upset that they are up to their necks in college loans and don't have jobs.  Although a college degree does not guarantee you a well paying job, it has long been expected in this country that earning a degree would definitely help out in the long run.  Today, a lot of people are beginning to question whether this is still true, or true enough to justify the increasing expense.  My friend and TradeKing co-founder Kevin Corrigan is one who thinks it isn't.  He has a 13 year-old son and, looking forward, thinks that spending on college might be a waste.  "Unless he gets a big-time scholarship, he should be a fireman, cop or municipal employee right out of high school.  Work for 20 years, retire at 3/4's and full 'bennies', then get a side job at 42 and he's set." Of course, with cuts in State and Municipal jobs likely hitting most areas of the country, this time-honored American recipe may be about to change dramatically, too.    

 

What do you think?  Is the increased cost of tuition worth it? How would you or are you counseling a high-school aged child about what the next smartest step might be for them in this dynamic world and economy?

 

 

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Posted by bigdog on 11/02/11 at 09:23 AM

Comments

WallStreetKing posted November 02, 2011 (10:26AM)


I drive down mainstreet, in my paid for free and clear 99 VW Jetta Fully loaded with all the featured comforts of that year Jetta, the interest and base amount of the loan has been paid, I continue to work and still seem never to have enough, I pass a small parcel of land that has a very small building with a sign out front FREE FOOD, I continue to drive past the closed down businesses and some newer bussienesses mostly restaraunts. empty parking lots of mainstreet bussinesses as I have seen in at least five other economic downturns during democratic push of their financial idea of america.

always happens the same way, a dead person, bankrupt and some lawyers that went to a school and never worked wants the property to sell.

Then another generation wants something better than what they see as they drive through the poverty stricken neighborhoods and fundraisers of the government.

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Fred posted November 02, 2011 (11:40AM)

Dear Big Dog;

I have two daughters 10 and 14.  The oldest wants to be a second grade teacher, which in and of itself is wonderful.  I want very much for her to have a fulfilling career that she can enjoy.  My concern is the cost of education and her ability to pay for it as a teacher.  We live in Colorado and just today an initiative for a small sales tax increase to support K-12 and student loan programs was defeated in the polls.   On top of that the governor announced his new budget which contained another 90 million dollar cut to education funding. 

To me your question is a very interesting.  I choose not to go to school until I was in my late thirties.  My plans were to never go to college because of the trap of debt and and feeling indentured working to pay it off.  After many years of scrapping to get by and working construction jobs outside during the winter I decided that maybe school and a professional indoor career would not be so bad.  My chosen degree was Chemical Engineering mainly because it had the highest paying salary out of school.  Money was not the only issue I do enjoy math and science, but money was 90% of the decision.  In retrospect I am glad that I did go to school.  I have been able to support myself and my family well for the past 20 years.  A big part of this I attribute to the degree I chose and the demand for that skill set. 

Interestingly my father attended an ivy league school, because his parents were very affluent.  My father was able to help me with some of my education, but I will be hard pressed to help my daughters with their education.  In our family we have definitely seen a steady erosion of wealth from generation to generation.  When I look at my ability to help my children pay for their education I am very concerned.  I do believe that a secondary education is useful and should be available to everyone for a reasonable cost.  In the current state of the world the more educated the populace the better the society will be.  Do I think that everyone should go to college? No,  I think that people need to be very careful about the path chosen and their ability to pay off the debt incurred. However, I think as a society we need to work to make secondary education much more affordable.  After all we need teachers and many other professions besides doctors, lawyers and engineers.  Other professions may not pay as well, but they play a critical role in our society.  In order to continue to attract good people to professions such as teaching secondary education needs to be affordable based on their ability to earn a living and repay their debt.  

So, I do not believe that we should pay for everybody's college education, but I do think that as a society we need to do a much better job of controlling the costs of education and supporting the educational system.  Additionally, we need to provide counseling and programs to support individual decision making to prevent the current debacle that our student lending system is in.  The situation is very similar to the whole real estate bubble and the loose lending programs.   While I support free enterprise we are not doing our youth any favors by lending them $100K in student loans only to graduate into a career that pays $20-30K a year or worse yet there is no opportunity for employment in their chose field of study.  My two cents......

incubus posted November 02, 2011 (04:48PM)

In a world where most countries offer healthcare and education which is reflected in labor costs & wages, change is inevitable if we expect to continue participation in globalization.

Either that, or you buy the idea that the "99%" that the OWS movement represents will finally just quiet down and accept a gradual demotion to a third world standard of living.

There are some long term plays to derive from this, I just can't see those two U.S. sectors maintaining the growth they have, (atop financials).

treeHamster posted November 02, 2011 (05:43PM)

In reality if you are spending more than $15k/year on college and not going to a top 20 school in the country, you are over paying for something. The reality is that most jobs honestly don't need a college degree, companies just want them because they don't want people who will quit after a few months. College these days has turned more into an expensive party and less education. Now engineers, doctors, and lawyers definitely do a LOT more work than partying that much I can say for sure. But these professions account for only a small fraction of the work force. What college honestly should be is more like an extra two years of education that you pay for and cut out all the crap extra classes that aren't needed. I can say for sure that I don't remember a darned thing from English Lit nor from Chemistry (and I took two Chems). I have a degree in electrical engineering and have no intentions of being an engineer for a career path because it pays nowhere near enough (sure you start out alright but you plateau VERY fast). I'm working on learning and practicing trading so that I can become an investment fund manager.

An investment fund manager doesn't require more than maybe 1 year of college as most of what you do is research and modeling which can mostly be learned in that 1 year. I took 3 calc classes and will never ever need them for finance. Heck most teachers don't even use much math. My point is that, college at one point was for the rich to go and become educated in many aspects. Everyday people have no need for a super well rounded education and it therefore just wastes money.

To my second point, education isn't anywhere as necessary as companies make it seem. As long as you have ok grades, you won't be asked any specific academic questions in an interview (unless you're going into a technical field). So most kids spend their time having fun, drinking, and screwing around more than studying and trying to push themselves. Not to say social skills aren't important as the foreign exchange students that flood the graduate schools have little to no serious social skills and very little knowledge outside math or science.

The point is that college isn't something that's honestly needed for most professions as they have on the job training for the specific thing you will be doing. College has turned into an excuse for universities to boost their numbers to try and increase PR as well as their funding budgets.

We would probably be better off if high school were extended 1 extra year to include more applicable training classes then shuffled off into a career for most people and then college for the handful that wished to move onto things like math or science. I can honestly say that I could probably have taught k-8th grade coming straight out of high school with just a bit of subject prep.

Oh and by the way, college isn't ANYWHERE near as expensive if you make the children work while they're in school. I worked 30-35 hrs each week throughout college and paid for it all out of my own pocket (no money from mom and dad). Granted I did live at home but it's still possible if children budget their time and money correctly.

Now I work part time as a software engineer intern while trading and managing a tech startup, and the college education only helps me with one of the three. I'll let you take a guess which one that is.
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vja posted November 03, 2011 (12:03AM)

if you can afford it and want to learn somthing go to collige but if you want to go for a better pay check then cosider this, most A,B stundents work for the D and dropouts anyway.

spshapiro posted November 03, 2011 (08:51AM)

There are two entirely different views on the purpose of education.  One is that it is there to help people learn how to earn a living. And the second, is that  it is to help people to learn how to problem solve.  In order to do the first, higher education is not necessary.  You could learn job skills on the job (apprenticeship) or at the equivalent of the Acme Driving School. In point of fact, many industries believe they must ‘unteach’ what has been learned in graduate education to make a good worker.

Learning how to problem solve, need not ever have any direct material involved with a person’s future work.  Learning how to problem solve has to do with learning how to think clearly and effectively, without significant regard as to the particular subject.  It generally starts with learning how to recognize that you have a problem in the first place, and proceeds through analysis of its conditions, possible solutions and what it might take to effect those solutions.  Once learned these skills are transferable to a host of future situations, but they do not in themselves yield answers.  The answers come from the application of the skills, and most of the time that takes place after formal education.

So when I read, “Everyday people have no need for a super well rounded education and it therefore just wastes money,” that may be true of the first notion of education, but it was people coming to the university with this narrow conception that convinced me that I would be best served leaving the joint.    

bigdog posted November 03, 2011 (09:39AM)

From an AP story this morning:

"...total outstanding student loans exceed credit card debt, increase by $1 million every six minutes and will reach $1 trillion this year..."

skyflier posted November 03, 2011 (10:48AM)

Just my thoughts on this as a person under 30. I never went to college, I have a good paying job that I never could have got if I would have have went to college. I do rent a house, but I have 0 debt and probably wont buy one until I can pay cash.  Living in a state with one of the highest unemployment rates I am amazed at how many job openings I run across in my business dealings that are far better paying than the average wage of a college graduate.           Why doesn't anybody get interested in trade school?  Get the skills to do work that is actually in demand. It seems that nobody wants to work. Because there is jobs available. Sometimes you need to get the skill that is in demand rather than just what you think you want. I wanted and still do to be a commercial pilot and I could pay for it without debt, but it doesn't make sense with the current pilot surplus.       Anybody consider how many people with no college, or no high school even, created their own very successful businesses?

The Eagle posted November 03, 2011 (11:13AM)

As a current college student, I just felt that it was expected to go to college to get a degree and make more money than I would if I just had a high school degree, but I could use the money that would go towards tuition towards other important things, I suppose. I currently attend a small private liberal arts college. Tuition definitely is not cheap and I am glad that I have my parents backing me for college tuition, otherwise, I am not sure if it would be worth attending a private school vs. a public one or trying to find my own niche elsewhere. Regardless, I have a nice scholarship that helps pay for school, but if I didn't have that scholarship, tuition would be around $35,000 a year or more and tuition just increased again this year. When my parents went to school it cost around $2,000 to attend back in the 70's and now it's tens of thousands of dollars per year; that's a pretty drastic increase.

I feel that if I want to make it in the job market that it is important to get a college degree. I am also looking at attending graduate school once I finish my undergraduate degrees. Regardless, I think it depends on what you're attending college for. There are many different degrees out there that people major in and not all of them will lead to a job. I know someone who majored in guitar, and honestly, there's not many job options for teaching guitar or degrees similar to that. If you're going to school to become a pharmacist, a doctor, mathematician, etc. then college is probably going to be worth it.

treeHamster posted November 03, 2011 (02:33PM)

I can personally say I dropped out of graduate school to pursue a start up and I will say nothing in graduate school can help you with a start up unless you're looking to go into something truly cutting edge such as advanced astrophysics for zero-point energy machines. Then a PhD would be helpful but otherwise, most of what you learn in graduate school sets you up to be lead worker bee but still a worker bee. If you want to pioneer something on your own, then the resources are out there and you just have to put the time and effort into it. For my start up we are developing a holographic display and nothing in school can really help us as the research for it is out there, we are just trying to figure out how to make it and make it cheap. Graduate school is great if you want to create the equations from scratch or pioneer a new way of thinking but otherwise true ingenuity and success is from hard work, creative thinking, and risk taking. College isn't about risk taking and therefore not as necessary.

TampaJake posted November 03, 2011 (11:31PM)

One of the best financial decisions I ever made was to enroll my kids in the Florida Prepaid College Program. I paid $90 bucks a month over a 18 year period and tuition is paid. Both of the kids have scholarships which pay for all of the extras. My wife's boss enrolled his 3 year old daughter and the cost for ONE child is now about $250 a month for prepaid. Today, I could not afford the tuition. Without the program my kids would be working 35 hours a week and paying their own way or would be drowning in student loans at graduation. They would probably be going to a community college rather than a top state university.

I will say that if a child wants to go to college the first step is to pay an early visit to a guidance counselor as a freshman. There are so many different scholarships & grants available that may not be tapped into without that trip to the counselor. Parents... you may want to talk to the counselor as well. You know how reliable kids are with relaying that kind of information to you.

spshapiro posted November 04, 2011 (12:30AM)

I know you hate it when I do the history lesson thing, but it’s your own fault if you keep on reading.

There was a big change in the attitude towards higher education after Sputnik.  Prior to WWII, higher education was not a real option for those under the upper middle class, unless you were ‘really smart’, ‘really driven’.  After WWII the GI bill put a lot of men into college, but it was really a way to suppress the surge of people looking for work, which would have made the post war recession much worse.  Then in the fall of 1957, the Russians surprised us (so much for our intelligence) and we funded higher education because we were scared to death.  (Ask your grandfather about the bomb shelters.)

I was ten in 1957, and by the time I got to high school (1962) all I heard was college, college, college.  We had an English teacher that we took bets how many times he would say that word in a 52 minute period (a guess from the high twenties to forty was about appropriate.) By 1965, if you were smart or athletic, you could get a pretty good scholarship (need had nothing to do with it.) If you were neither, but willing, small scholarships, work/study and loans were available.  Just about anyone who could carry a C average could find a school, and with that went a 2S deferment (which got you out of going to Viet Nam.)  In other words, we went from a society where college was a ‘luxury’ for the few to one where you were told you wouldn’t amount to anything if you didn’t go.

I’m not saying that college is for everyone, but in case you haven’t noticed, I don’t make up the rules around here. Until we change the perception that there is something wrong with those who don’t go (don’t tell me about Jobs or Gates, we know there are always exceptions), who is going to be the parent who sacrifices their child to grow up as William Bendix (The Life of Riley) or Ralph Kramden (your homework is to look that one up.)

incubus posted November 04, 2011 (09:14PM)

"One' a dese days Alice..."

sublimevotum posted November 15, 2011 (02:05PM)

I just graduated college several years ago, right in the midst of the Great Recession, and I believe that getting a college degree was definitely worth it for me! 

Granted, I'm not exactly doing what I want to do; I'd prefer to work a finance-related job.  But I was able to get a decent paying job after I graduated college, and the main reason I got this job was because of my degree.  While many of the friends I graduated with are still struggling to find decent-paying full-time work, they have definitely fared better than my friends who decided to not go to college.

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