• Bob Brooks

Is a College education still a good investment?

This might not be a very popular article.  Candidly, I don't really know the answer to the question that I pose in the title.  I could actually ask that question in a number of ways.  Is a college education still a good investment if the student graduates with mountains of debt?  Is the traditional way of going to college in which the experience is an equal mixture of social and education still appropriate for this day and time?  Is it a good idea to give students loans just because they are going to school versus giving loans based on solid criteria?

Let's look at some studies that have recently come out and draw some conclusions.  A recent study by the Pew Charitable Trust shows that 75% of US adults said college was unaffordable for most Americans. 

Only 40% of those polled suggested that college was a good or excellent value.  Ironically, out of the college presidents who were polled, 17% considered it an excellent value, 59% considered it a good value, 21% considered it only fair, and then 3% considered it a poor value.  Coming from those that tow the company line, I would have thought the percentages would have been greatly in favor on the side of excellent. 

College debt is now larger than credit card debt and continues to increase in percentage. President Obama has a big initiative to increase our success rate regarding college educations compared to other countries. Currently, we rank 12th out of all countries.  

A Center for College Affordability report shows that over the last two decades, colleges and universities have doubled their full-time support staff while enrollment only increased by 40%.   

Just a few days ago the National Inflation Association released a report calling the college education system a scam.  It is the only consistently increasing costs in America, going up on average 5.15% per year. They also report that:

"The government gives out easy student loans to anybody, regardless of grades, credit history, what they are majoring in, and what their job prospects are. NIA believes it is illegal for the U.S. government to be in the student loan business because the U.S. constitution doesn't authorize it. Just like how the U.S. government created Fannie Mae and Freddie Mac to make housing affordable, but instead drove housing prices through the roof; the U.S. government, by trying to make college more affordable, is accomplishing the exact opposite and driving tuition prices to astronomical levels that provide a negative return on investment.

Despite this, 70.1% of high school graduates are now enrolling into college, a new all time record. The real unemployment rate in America is now 22% and 60% of college graduates who are lucky enough to find a job, are receiving low skilled jobs where a college degree isn't even required. In fact, 70% of high school graduates who didn't go to college were able to get these very same jobs as the average college graduate.”

So this begs the question - given the current economic environment, lack or depleted savings, coupled with the rising costs of tuition that continue upward, is traditional college education a good deal for those who just cannot write the check?  

It also makes no sense for the government to hand out money like candy to students to go into debt to attend a college education system that is allowed to increase costs at a higher rate than any other sector in the country.  Keep in mind, that government loaned debt is like being in debt to the mafia - there is no relief.  If you get into trouble with this type of debt, there are no good options. 

Students, think harder about the future and how you are going to get there.  Unfortunately, the Government obviously doesn't want you to think by just giving a free student loan ride and end up being heavily indebted.  For those who can't just write the check, school is going to be about the student working, taking longer to get out of school; gone are the days of the luxury of going to school to have a good time.  In this environment, graduating with a huge debt is just not worth it.