Home > Education, Learning, Work, Youth > The cost-benefit analysis of higher education

The cost-benefit analysis of higher education

Shortly after graduating law school, a dear friend from law school told me he’d encourage his future kids to go to trade school. At the time, I was shocked by the idea of not encouraging one’s offspring to obtain a higher education, which I then perceived as one key indicator of success.

Today I understand. As I set aside money for my own son’s future, I, too, hope he will use that money for trade school or investment in a business versus sinking it into an education apt to be far more costly than it is beneficial.

When I signed up for six figures of initial debt for law school, I did so understanding only abstractly the costs of that choice. Now, at the age of 33, I can look back on eight years post-graduation and see the very concrete, very unfriendly impacts of that choice. Paying the principal itself is hard enough these days, though I  make sure to pay extra in principal every month despite this.

But wait! There’s more! Every time I look at the interest I’ve paid so far, I want to reach back in time and shake some sense into my 22-year-old self. “I know you think it’s gonna be worth it and that it’ll be a breeze to pay it off, but don’t only think about what you’ll have–namely, a J.D. from a great institution. Think also about what you won’t be able to have as a result of  all this debt you’re about to take on! Think of the interest you’re going to have to pay!” I have already paid in education loan interest alone an amount that could easily have been a down payment on a house.

And, oh! A house! Once the thought of my own house was an appealing one, but today the thought of adding hundreds of thousands of dollars of debt for another “investment” that might or might not pay off in the long run is far from appealing.

Before I started talking to friends and reading blogs about the impact of costly higher education choices, I figured I’d simply made a poor decision borne of youthful idealism. After reading about the staggering number of other people whose education debts will be with them for 20-30 years, I see that my decision was not so unique.

I see also that I can’t unmake it. I can’t really go back in time and advise my 22-year-old self to avoid inescapable, enormous debt in favor of working her way up through the ranks in a field she loves, helping her see the merits of being able to maneuver through her future without that cubic buttload of debt. If I could, I’d help her see the cost of the education she was choosing–the exceedingly steep one that every single other choice she made for decades to come (longer than the span of her life so far!)–would be defined by that one choice and I’d invest as much time as necessary for her to finally run fast and run far from a future of that burden.

22-year-old Deb’s choices are made, but what I can do is talk to the younger generation about the cost of education. I can urge its members to make their educational decisions understanding that the merits of a degree are limited while, conversely, the ways that the cost of that education might shape their decision in years, even decades, to come are limitless.

Future college students, before you sign on the dotted lines, please ask yourself if what you’ll be paying for this choice for many years to come is worth it. Ask yourself, “Is there a way to get where I want to go without sinking a hefty portion of my future earnings into it, and limiting my future career choices to ones that’ll allow me to pay off those debts?” If you’ve known what you wanted to do from the time you were four and a degree is required, the benefits are likely well worth the cost. If tuition is inexpensive enough that you can pay it off within a few years or you’ve gotten full or sizable scholarships, hurrah! Make the most of it!

If, however, you’re not absolutely certain what you want to be doing twenty years after you graduate, or you believe you can make another way for yourself (and you can! a degree isn’t a magical key to success), or you’re downright squeamish about the prospect of paying hundreds of dollars monthly for decades after you graduate, please seriously consider just saying no.

In the end, a degree really is but a piece of paper, no matter how reputable the institution from which it’s issued. It might help set you on a course, but that is all it will do. The choices you make day in and day out will be what truly defines the future ahead of you, not a piece of paper or the classes you took to obtain it.

I was advised, but failed to heed the advice. My mom’s long-ago divorce attorney took me out for lunch when I graduated from college. I was surprised by his consternation when I told him I’d be going to law school, inspired originally by want to be for other kids what he was to me. “You don’t have to do it just to prove you can do it, Deborah. Everyone else knows you’re smart enough. Figure that out the way everyone else already has and choose something you really want to be doing. Work your way up.”

Back then, I waved him off. “There’s so much more to it than that!”

But hindsight is 20/20, and it’s easy to see from here how right he was. I believed that piece of paper would prove my worth to me, an objective I then perceived worth a great deal of money . . . especially if it came with the promise of solid paychecks to come!

It wasn’t that paper, or the steps that preceded it, that eventually earned me my self worth or my paychecks. It was the sum total of a thousand later choices that helped me earn these things.

Good choices will pave your way. So when you’re considering that dotted line, ask yourself, “Is this education worth all its costs to future me?”

Please do your best to choose wisely not only for today, but for several thousand tomorrows.

This was among posts accidentally deleted from this blog.
I repost it today having learned of yet another
tuition hike at my alma mater.
Reposted 3/12/16

  1. March 12, 2016 at 6:17 am

    This is a very wise piece that should be read by as many young people as possible…your point about seeking what you love to do first is so true, yet it is so elusive much of the time. Well done!

    • March 12, 2016 at 6:35 am

      Oh, man, but it is good to see your name after what feels like forever!

      I wrote this post four years ago. Since I wrote it, I’ve read countless pieces about education (cost and in general) versus advancing through less costly, also effective ways. We live in a world where the courses taught at universities are now available online, and one where it’s easy to pursue your passion in ways that can earn you acclaim before you’ve even reached your teenage years!

      Universities today are banking on the fact students still see those degrees as magical pathways to something better, when indeed, they’re increasingly costly without any guarantees whatsoever.

      This is why I’m exploring with D things he can do to pursue what he loves, even if it changes by the day/week/month/year. What he does outside school will be more influential on his future, I believe based on my last year’s reading, whether or not he has a costly piece of paper with his name and a university’s name written together.

  2. March 12, 2016 at 6:24 am

    I think it’s almost a crime to expect people to spend their whole career paying for the privilege to be in that career. Something HAS to be done about the cost of higher education.

    • March 12, 2016 at 6:39 am

      Hear, hear.

      It feels criminal to me. Reading that article I linked left me feeling so forlorn, since impoverished students will be hard hit by each percentage increase. I was one such impoverished student, and I learned in one of my classes that people in my income bracket comprised less than 2% of the college populace … back when tuition was comparatively affordable! Not sure whether the “equal” is in that education.

      And a 4.7% increase in one year? That’s huge to anyone, but especially significant to someone whose family has no money! If paid for by loans, it’s even larger due to the interest that will be paid for it … and payable whether or not there’s a job with which to pay for it.

      I am glad for freely available internet and computers, in a world that makes education more accessible than ever … to those who understand it’s out there, a knowledge I wish I could disseminate to everyone, everywhere.

  3. March 12, 2016 at 7:19 am

    The messages in the zeitgeist that tell kids the way to success is through a college/university degree are hard to counter. I have 2 enrolled in Bachelor’s programs – one nearly finished and contemplating “what next?” and another just starting on a “practical” engineering degree. Although we encouraged them to look a other options – skilled trades – the academic pressure, both internal and external, led them to college/university. We are lucky in that we live in a city with two excellent post-secondary options so with our help and their scholarships, their debt will be minimal but I know how lucky we/they are and this is not the majority. At my workplace, the newest hire in our department has a PhD in an arts degree. Before she came to us she was a barista in a local coffee shop. She is 30 years old. It makes me weep. Anyway, wise post, Deborah. I wish more people could be courageous and step out of the predictable rut that leads to debt and disillusionment.

    • March 12, 2016 at 4:33 pm

      I still see so much external pressure about going to college still, as generations benefiting from much lower (even accounting for inflation) costs of education tout the benefits of the education without necessarily understanding costs in today’s terms. That’s actually how an Atlantic article I linked below began: someone’s grandpa was proclaiming the merits of working one’s way through college, which prompted him to do tons of research summing up just how much more costly it is.

      The me of a year or so ago was pretty panicked about the fact most every senior class now paid more–well outside increases attributable to inflation–than did the class before it. I’m still aggravated how many people are being effectively denied education due to this increased costs, but I’m also heartened by what I’ve taken away from a year’s worth of reading: that there are so many alternative pathways today, and so much knowledge available to assist traveling them.

      It’s exciting to me that you encouraged alternatives! If one or both my sons decide to pursue traditional education, I’ll do what I can to support practically as well as emotionally. (Since I’ll still be paying off my own law school loans, the emotional support will be easier to provide.) But if they want to pursue alternative pathways, I’ll support those, too, and do everything within my power to ensure they achieve well rounded and mind-expanding education no matter how it is they achieve it. 🙂

  4. March 12, 2016 at 9:54 am

    Thank you for this post. We have three collage age kids. One at a university, one community and one who paints 😍 and I think I might share it with them. Obviously we help them however we can on the financial end…car insurance and repairs, phone, health and dental care, but I worry for their future post-graduation. I want their happiness and don’t want them terrified when they realize their jobs won’t be $1,000,000 off the bat to pay off their education debt.

  5. March 12, 2016 at 10:56 am

    This is so true, Deb. Thank you for finding this post. I hope the youth who read it, get it. I was accepted into university and completed the summer orientation. Dad was going to help but then circumstances happened and he couldn’t. I was momentarily devastated. We explored the options of loans but the thought of debt petrified me even then. In the end, I went to community college, obtained a degree and used life experience to do things and see places, courtesy of my Company.

    I am mentoring a 23 year old from another country. She has college debt 10x greater than the average annual income of that country. It is staggering. She is humble but admits many in her genration DO expect the high paying jobs out of the gate. After all, they paid for the education to get them a high paying job. People say it is a sense of entitlement and in some cases it may be, but I think naivete plays into it as well.

    You already know my thoughts on buying a house. It isn’t an asset until it’s paid for. 😃

  6. March 12, 2016 at 11:47 am

    I was really lucky in that when I went to uni (in the UK) we still had grants to help pay rent/food and there were no tuition fees. I had a £1000 loan which I didn’t start paying off until I earned more than £13k (I think) a year. I loved university. It was a fantastic, eye opening and probably life changing experience but it was the work experience I did during the holidays that got me the start in the career I love. I hear of people coming out of uni £30k or more in debt now and I know that I would never have gone if that was my choice. It makes me really sad for many reasons – not least because I think uni should be about more than just a path to a bigger pay cheque.

  7. March 12, 2016 at 2:14 pm

    Way back in the 1970’s I put myself through college without any debt by working full time, and taking classes as I could afford them. I never used my college degree — every job I’ve ever had developed from my work experience. I enjoyed college classes, but it wasn’t worth the price even then, though it did placate my father who had disowned me for NOT going to college immediately out of high school.

  8. March 12, 2016 at 3:57 pm

    I’m going to sound a bit like a Pollyanna here but I consider my college degrees to be some of the most meaningful and positive accomplishments of my life. Of course, they’re paid off now and I’ve come to accept that I was sold a bill of goods by the universities as to what the degrees would do for my career. That being said, the opportunity I had to learn and to explore ideas is probably one of the coolest, most empowering experiences of my life. So while I get how discouraged everyone here is about what didn’t happen because of higher education, I’d say that in the long view we are all better off having challenged ourselves to learn more about something of interest. The numbers might not support my premise, but a well-rounded life lived aware of more possibilities does.

    • March 12, 2016 at 4:21 pm

      I agree with your conclusion, but I don’t agree that higher education is an exclusive or even primary pathway to that today.

      In a world where MIT (to start!) makes many of its courses available online, and where countless other, similar resources are broadly available, availing oneself of knowledge traditionally only available to those actually attending college physically is becoming astonishingly easy. Where once this particular brand of enlightenment was a result of attending university and having access to an institution’s comparatively abundant resources, more and more learning resources are becoming more and more available decoupled from particular institutions. The educational possibilities are expansive, and available to so many more people unable to benefit from traditional higher education than probably realize it.

      Though I’m no fan of Facebook (hard to guess, huh? ahem!), I was heartened by Mark Zuckerberg’s recent commitment to personalized learning. There is so much hope for the future, with more people having more access to more educational tools! The more everyone has such access, the more the world will benefit from knowledge and wisdom of which it’s currently deprived as people are undereducated or not afforded education at all.

      I loved my university experience, and I even loved my law school experience … if more for the asides than the school itself, in the latter case! I’m grateful I had those experiences, but not 11-years-and-still-$60k-of-debt grateful I had them. I’m also grateful that I came out of undergrad owing so comparatively little, so that my debt load is much lesser than it could be.

      (I tried finding one particularly illuminating infographic about rising tuition rates. I couldn’t find it, but there’s good illustration here. There’s a good article in the Atlantic about the myth of working one’s way through college today. The number of inflation-adjusted hours to pay tuition is many times higher than those required just a few decades ago. Here’s another good one, too, pointing out how college these days is speculation, not investment.)

      Despite the abundance of educational alternatives today, I do still think the university model has some merits I wish more could experience. I just don’t think those merits outweigh the costs any longer, and so I welcome the educational revolution, though it’s weird and a little discomfiting to realize that my sons’ educational experience will almost certainly vary profoundly from my own.

    • March 12, 2016 at 4:22 pm

      Also, I happened to be sitting next to my computer reading a book (the one on coffee) when your comment came in, in case you were wondering about my unusually speedy response. :p

      • March 12, 2016 at 6:26 pm

        I can only imagine how complicated it’ll be in the future to figure out the right path to go down for higher education. I agree, we can only hope that more ppl will be able to learn what they need to know so that they feel empowered + productive, not burdened by debt. Fascinating to watch the changes in higher education unfold throughout my life. Good post, got my thinking. Thanks.

  9. March 13, 2016 at 6:18 am

    wow, such a great post. Even I am thinking of pursuing MBA from one of the best b-schools in the world and it costs a fortune! No matter how high your scores are. Yeah there are many scholarships, but no one can be sure whether one can actually get that scholarship. Even if one gets the scholarship, the rest of the tuition fee+boarding+food+travel+books etc still costs a fortune. You have correctly said that the piece of paper will may be get me to a good position in an awesome company, but I will probably have to drop a lot many plans or wishes just to pay the loan back with interest, at least for few years. Those few years would be when I will be getting married, planning for future, planning on buying a house or even start up a business. I do not know how much I can fulfill my wishes, if I have to pay half my salary to the bank.

  10. March 15, 2016 at 8:02 am

    Yesterday we were doing a college tour, Mr. T has decided on a college – a private university not that far from us. Fortunately, he’s done a lot of research on exactly what he needs and what short cuts to take to get him to his final destination! Between scholarships and living at home (thus saving the boarding costs), we are looking at minimal expense… considering we are looking at a private university! LOL. I never went to college, so this experience is all new to me, but he seems to have it under control! Thank goodness!! 🙂

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