From my vantage point, we are creeping dangerously close to where the cost of the degree will outweigh the value of the degree. I know that it depends on majors, but kids are going 40K + into debt to go unemployed for 6 months post graduation and then make 40K a year if they are lucky. If they are lucky, they'll top out at 75k/year. In the mean time, they are losing valuable investing, financial independence, and unfortunately, the accruel of more debt as they purchase or rent borderline necessities (car/shelter). At what point is it better to go to a trade school? IMO, it is better, if possible, to live w/ the parentals for a few years and then either start at night, work during the day, or work full time and save. We had kids paying 15K+/year at Hanover to major in Education??? What kind of financial plan is that?

Just like you said it's getting very very close to not being worth the cost. That's troublesome for the job market as well. If the trend continues they'll be forced to hire less skilled employees or employees with a great deal of debt. I truly believe that the cost of college tuition is directly connected with the struggles in the housing industry. It's hard for a 22 or 23 year old to feel comfortable buying a home when they are already 40k plus in debt before ever putting any thing towards a house.

.........

 

From a 2009 study on the subject:

 

Median lifetime earnings rise steadily for workers with increasing educational

attainment. Overall, the median lifetime earnings for all workers are $1.7 million, which is just

under $42,000 per year ($20 per hour). Over a 40-year career, those who didn’t earn a high school

diploma or GED are expected to bring in less than $1 million, which translates into slightly more

than $24,000 a year ($11.70 per hour). Obtaining a high school diploma adds 33 percent more to

lifetime earnings; the average annual earnings of people with a high school diploma are $32,600

($15.67 per hour). Clearly, then, the economic penalty for not finishing high school is steep —

almost $9,000 a year. For someone with a bachelor's degree, lifetime earnings are $2,268,000 and

a Masters' recipient is $2,671,000.

 

http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/collegepayoff-complete.pdf

Just like you said it's getting very very close to not being worth the cost. That's troublesome for the job market as well. If the trend continues they'll be forced to hire less skilled employees or employees with a great deal of debt. I truly believe that the cost of college tuition is directly connected with the struggles in the housing industry. It's hard for a 22 or 23 year old to feel comfortable buying a home when they are already 40k plus in debt before ever putting any thing towards a house.

 

I'm not sured how much more a degree would make you skilled than a kid w/ 4 years training in your system? Companies now are hiring these kids out of college who have the ability to think, but lack focus. They are 22, 23 years-old and need to be reprogrammed. Many kids would be almost as qualified if they joined the company straight out of high school and were trained from the get go. Further, they could continue their education w/ or w/out a company offered incentive plan and tuition reimbursement to achieve higher levels of education. At least their studies would be more focused. I went to college right out of high school, majored in business, graduated four years later and still wasn't sure what skills I really had, and how they translated. Once I took awhile off and focused on what I wanted to do, it made law school more sufferable b/c I was looking at a certain area that related to what I did every day. I became engaged.

.........

 

From a 2009 study on the subject:

 

Median lifetime earnings rise steadily for workers with increasing educational

attainment. Overall, the median lifetime earnings for all workers are $1.7 million, which is just

under $42,000 per year ($20 per hour). Over a 40-year career, those who didn’t earn a high school

diploma or GED are expected to bring in less than $1 million, which translates into slightly more

than $24,000 a year ($11.70 per hour). Obtaining a high school diploma adds 33 percent more to

lifetime earnings; the average annual earnings of people with a high school diploma are $32,600

($15.67 per hour). Clearly, then, the economic penalty for not finishing high school is steep —

almost $9,000 a year. For someone with a bachelor's degree, lifetime earnings are $2,268,000 and

a Masters' recipient is $2,671,000.

 

http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/collegepayoff-complete.pdf

 

Now, what is the median debt carried by a college graduate, or a Master's recipient?

Based on the numbers in MTGL's post, the college degree earner makes just under $1M more in their lifetime than the average high school graduate....So basically the ROI on a college degree would be $1M/cost of debt....Say you rack up $50,000 in debt. That's still almost a 20:1 return on investment....I'll take it. Best investment one can ever make is in their college education IMO.

Now, what is the median debt carried by a college graduate, or a Master's recipient?

 

Don't know, but if the difference between a high school graduate ($1,304,000 in their career) and a college graduate ($2,268,000) is remotely accurate, the answer to your original premise is we aren't close to the cost outweighing the degree. $964,000 is a lot of cash, and that extra $24,100 per year starting in year #1 ($964k / 40) is still squarely in their favor.

 

Interesting topic though, for sure! :thumb:

I do think the degree you get and expected earnings need to be factored in. For example, if you are going to be a teacher or social worker, going to a $40,000 a year college just isn't smart IMO. It will not add economic value.

Don't know, but if the difference between a high school graduate ($1,304,000 in their career) and a college graduate ($2,268,000) is remotely accurate, the answer to your original premise is we aren't close to the cost outweighing the degree. $964,000 is a lot of cash, and that extra $24,100 per year starting in year #1 ($964k / 40) is still squarely in their favor.

 

Interesting topic though, for sure! :thumb:

 

As I said before, it really matters on what you are going to school for and what career you are trying to obtain. Stats don't tell the whole story due to the life events going on during those earning years. Most jobs don't pay much more/if at all for the first 5 years. As you progress, that's when the difference starts growing. In that 5 to 10 year range, who knows how finances can be impacted. Really,what kind of fiscal discipline you have plays the largest part, and you can't measure that in a study.

 

Here's why I asked this. Our job, skill wise, does not require anyone to have a college degree. As long as you can stay organized, sound competent on the phone, and hustle, you'll do very well. We require a degree as a weed-out, but people will still get hired without it depending on needs. Eventually, kids are not going to be able to afford college. Certain companies really will be hindering themselves by limiting their employee poll to college grads, especially at the entry-level. I mean, we did $100 million in sales the year before we went to purely college grads, so it can work.

Depends on alternatives. A good trade school certificate can earn you as much, or more, than many college degrees and job prospects can also be better. The averages used can be very misleading.

Depends on alternatives. A good trade school certificate can earn you as much, or more, than many college degrees and job prospects can also be better. The averages used can be very misleading.

 

Agreed, especially as those jobs (machinists, pipe fitters...) become more specialized and/or this gray generation begins to retire. There will be a shortage of qualified electricians, plumbers, carpenters, steel/iron workers. Too often, these are jobs scoffed at as jobs for the uneducated, or dumb....I just paid a plumber $150 to come to my house to fix a leak that took him all of 10 minutes. Who's the dummy now? My Dad subsidized us by wiring houses on the side.

For example, if you are going to be a teacher or social worker, going to a $40,000 a year college just isn't smart IMO.

 

That should create quite the shortage of teachers.

 

I would think people going into those two professions, by and large, aren't doing it to get rich, or even to break even in life's P & L. I tip my hat to those chasing a higher calling than benjamins.

A good trade school certificate can earn you as much, or more, than many college degrees and job prospects can also be better.

 

I agree with this, for sure, and know the advantages first hand. But for the example to support Mexitucky's points, one would have to assume they incurred a lot of college debt and then took a job they didn't need college for. Nearly everyone I know in a trade position went the route of trade school, therefore, came out debt neutral. I do know a couple of guys that went to college, got a white collar entry level job, and then decided it wasn't for them and hit the trades. They would be the perfect example of what not to do, but they are in the minority in my experience.

As I've gotten older I've come to the opinion that hard work, commitment, a good personality and the recognition and seizing of opportunities are just as important, if not more so, than a college degree(s). Of course, there are certain professions that require a certain level of school education.....and a degree, as previously mentioned, can get one in the door. But the successful people I've met, I believe, have relied on these character traits rather than a watered-down degree. A colege education has its place but it is not the end all and be all by any means.

I believe a degree, especially for something like business, just gets you in the door. My company won't look at you unless you have a degree. But once you're hired, I found no use of my business degree. They taught me everything I need for my job. Work ethic, personality, luck, etc determines how far you will go.

 

I am all for a school like Cincy State where you pick what you want to do and you share time between classroom/real world and help you get a job when you graduate.