It's time for one of my not-infrequent rants about the cost of college -- although I'm not particularly upset about the price of obtaining a degree. I don't run a college; I don't know how much it should cost to hire professors, fund research or build dormitories. I don't presume that I could do it for less.
But I do run a business, and I can tell you something you already know: If customers pay a certain price for a product, then that's what the product is worth. Only when customers vote with their feet does a business find a cheaper way to sell a product -- or it discontinues that product.
Because colleges don't seem to be closing and most have more applications than openings, I have to assume their product is worth the price.
Are you hollering yet? This is the point where parents and students protest that a college education isn't an optional purchase. As everyone knows, a college degree is the new high school diploma. Without it, you simply can't get a job. Employers won't accept workers with less education.
And we all know that people earn more money if they have more degrees. What's more, we all know that a state university is better than a community college, and a private college is best of all. Technical colleges? No way.
The problem with the assumptions in the previous paragraphs is just that: They're assumptions. The real issue isn't the cost of a college education but the outdated, inaccurate view most people have about the relationship between formal education and careers. For the sake of broadening the conversation, I offer these thoughts, in no particular order:
* With careers likely to span 40 years or more, why does it matter if college students take more than four years to complete degrees?
* If employers are so focused on degrees, why are their complaints so often about "unskilled" workers, not "un-degreed" workers?
* If employers hire only people with degrees, who hired the huge number of workers with no degrees?
* Do the studies showing increased earnings for degree-holders factor in the amount of money those earners paid for the degrees?
This last point really interests me. What if a student were to graduate from high school, live at home for four years and work full time at $8 an hour, saving half of his or her wages? After four years, this now-22-year-old would have $32,000 or more in savings, depending on raises received and interest earned. At this stage, his or her counterpart, the new college graduate, has a degree but no job, no savings and perhaps $30,000 or more in debt.
Fast-forward 10 years. Suppose the first student has enrolled in college, using an employer-based tuition program. Progress is slow, and the degree isn't expected for another year or more. He or she now earns a salary of, say, $40,000. It's not a fortune, but don't forget the original $32,000 in savings, which is closer to $50,000, thanks to interest. This worker also has 14 years of employer-matched 401(k) contributions and no debt.
Meanwhile, the college graduate started at $35,000 after college and has risen to $50,000. The matching 401(k) is there, but so is the debt. After 10 years, $20,000 remains on the original loans of $30,000. So this student will show up on the earnings charts as having a greater annual salary, but the chart will show neither the debt nor the other worker's savings account. Who is better off?
I know, I know. According to popular wisdom, the college graduate soon will eclipse the nongraduate in total wealth. But is it really that simple? What happens if one of them gets laid off?
Having worked with laid-off employees for 20 years, I can tell you: The one with debt will struggle. If both were laid off on the same day, the first one rehired would not be the one with the degree. It likely would be the person willing (and able) to accept a lower salary to start over somewhere else.
I understand that a lot of people -- many with very fine degrees -- will disagree, but here is what I have learned: Earning a degree will not protect you from losing a job, and it may not help you get the next job faster. Being debt-free, however, will make an incredible difference in every career choice.
So get all the degrees you want, but think hard before you take out loans. And if you buy the four-year package, don't get mad at the college for selling it. You do have options.
- Amy Lindgren owns Prototype Career Service, a career consulting firm in St. Paul, Minn. She can be reached at alindgren@prototypecareerservice.com or at 1071 W. Seventh St., St. Paul, MN 55102.