Hi there, it’s Someday Wise here again, ranting on about avoiding college debt. Sounds good in theory, but where are all these money saving options?
Consider the case of one Richard Linder who “cobbled together” an associate’s degree for a total cost of $3000 back around 2012. How did he do this? He got credit from learning he had already completed and knowledge he already had. Excelsior College is an accredited online school that apparently allowed Linder to transfer all his credit from an array of sources. This included AP test credit, FEMA classes, the National Fire Academy, and Microsoft.
I don’t know exactly how Linder obtained the credit in question – you may be able to hear the original podcast on the Chronicle of Higher Education to learn more. AP credit likely came from discipline while in high school. I can surmise that he made use of his initial post-high school years in a way that minimized opportunity costs, by doing some kind of paid work that also provided some kind of professional training. This is a viable alternative to going straight to college.
The classic model of college attendance is: graduate from full time high school (essentially your job as a mid teen) to attend full time college. This approach, which by the way is the one followed by one Someday Wise back in the 1980’s, is perfectly fine, if you can swing it in a financially responsible manner. But it’s not the only perfect model for everyone, and if I were facing it all today, I doubt it would be my first choice. I don’t see how it would be possible without taking on unacceptable amount of debt.
Attending college is not only a financial cost, but also an opportunity cost. Those four-ish years are somewhat helpful as a time to mature, but the college experience can be coddling in a way that extends adolescence. Many people skip college after high school, temporarily or permanently. They (hopefully) go right to work.
The work may not be in jobs that appear very glamorous to the rest of us. Retail and hospitality jobs come to mind and are often available for the taking. Fast food requires long hours being snarled at by a rude public at inconvenient times for low pay. But the jobs are typically there. And with a little experience and a good work ethic, it’s not that difficult to be promoted to a shift or team lead and begin developing management experience very early on. The professional training provided may have quite a bit of value as well, at little or no cost to the recipient. McDonald’s Hamburger University is one example.
In short, nearly any student who would be a good candidate for college, is also a good candidate for unskilled entry-level work.
Now how does this relate to the opportunity cost of attending college? Many people think that tuition and fees, room and board, and books and pizza/drinking money make up the bulk of the cost of college. That would certainly be enough of a price, and it’s exhausting just to think of it all. This is the dollars and cents piece of the equation.
But there is yet more to this story! During the years spent as a full time student, most people are NOT getting any real-life grownup job experience, and akin with that fact, most people are NOT earning a regular income. These two factors are examples of the opportunity costs, “invisible” values placed on the things you are NOT doing with your time while you are toiling away in the library on your linear equations or your Thucydides term paper.
And this gets to the REAL CRUX of my issue with college debt. College is supposed to be all about making you a smarter, shrewder, yes, I’ll say it: Wiser, version of the self who begins the journey.
But very few people begin that journey really understanding exactly what they are in for. In particular, they do not consider the VALUE EQUATION of their college education. People just mindlessly take it as a fact of life, that after high school you go to college, the “best” college that will let you into its hallowed halls, and thereby begin the journey into adult life and its associated lucrative career.
Many of them sign loan paperwork, semester after semester, committing to making monthly payments for future decades of their lives. A time when they will not, most likely, be very interested in draining hundreds of dollars out of their personal funds on a monthly basis. Their future life partners and dependents may not appreciate it very much, either, unless the return on this investment outweighs the costs. On the other hand, perhaps the partner’s debt is even worse, and then your student gets to share that burden as well!
If college is about making you into a smarter, better version of yourself, then why not start right at the beginning, providing the student with a clear and deep understanding of the path ahead. I promise you, personal finance is MUCH EASIER MATH than a lot of that advanced algebra and calculus they will throw at you.
Oddly, people who can handle calculus often don’t understand the simple, four-function arithmetic of their own college investment. And then they give these clueless, deeply indebted people DEGREES to show for their advanced knowledge. How does Someday Wise know this? Because she has had not one but many conversations with these students, and with their similarly educated parents, who have demonstrated this fact. And they all make the same, tired, “yes but our situation is different” arguments.
Ohh, Someday has heard a lot of those arguments. My student can’t do a cheap version of college because they want (something special). What do they want? A degree in a specific major offered by this very expensive college. An opportunity to study abroad. An atmosphere surrounded by other “serious students.” The chance to leave home and live on campus.
And every time, Someday Wise can’t help herself. She gets on the old internet there, and finds a cheaper alternative for the student in question. One that neither the student nor the parent wants to hear.
Or do they? You are reading this endless babble, so perhaps you are part of the tiny minority interested in alternative ways to complete college without debt (or with a lot less than you initially expected). If so, you may want to visit this page, with links to my other posts about avoiding college debt. Have a nice day!
Someday Wise 