Is College Worthwhile?

February 12th, 2013 posted by Jonni McCoy

college student “But, Mom, I don’t want to go to college.” Mary wasn’t surprised to hear her son talk that way. He had always been a reluctant student and she often wondered what he would choose for a career. “Look at Billy’s older brother. He didn’t go on to college and he’s doing just fine. He’s got a great car and his own apartment. What’s wrong with that?” “There’s nothing wrong with it. If he’s happy, that’s great. But by not going to college he’s limited himself in a lot of different ways. I don’t know the statistics, but I’ll bet he makes a whole lot less over his life time than someone with a college degree. Why don’t you spend an hour in the library and see if you can’t find out how much difference there really is?” Junior, like most seventeen-year-olds, could think of many places he’d rather be than the library. But, if that’s what it would take to convince his parents, then off to the library he’d go. Once there, he found a copy of the “US Statistical Abstract”. It contained data for 1995. Looking in the section on “Incomes, Expenditures and Wealth” he found table number 732 “Money Income of Persons”. That table listed the median income for males based on their education level. He noted that the high school graduate earned a median income of $23,365 while the college graduate earned $43,322 . He admitted that the difference was greater than he had expected. But, after all, he wouldn’t be the only one working. Most families he knew had two earners bringing home a paycheck. It probably would be better if he looked at family income. Looking back a few pages he came across table number 719 “Money Income of Households”. Junior eagerly looked for the section that displayed the data based on education level. What he found only reinforced the earlier data. Families headed by a person with a high school diploma earned a median income of $31,376 while families headed by a degree holder earned $58,052. But, that was only half of the story. He’d heard about the students who left college with huge student loans and spent years trying to pay them off. So he wanted to find some information on the cost of college. He found two sources of information about college costs. The American Council on Education had just published the “Report of The National Commission on the Cost of Higher Education”. The report stated that the average cost of tuition and required fees at a 4-year college was $3,151 per year . The cost at a 4-year private college was $15,581 per year . Ouch! Finally he was getting somewhere. If he could just show them how much this was going to cost his parents might begin to see his side of the story. Let’s see, if you add the dormitory charges and board rates for public schools that’s another $4,300 per year. So each year at a public 4-year school runs about $7,451. Junior jotted down the info and returned home convinced that this was one library visit that was worthwhile. That evening after dinner, Junior approached his parents. “You know, I could be saving you a lot of money. Just take a look at how expensive college really is.” John and Mary joined their son at the kitchen table. “OK, let’s start by figuring out what this will cost. So they say it’s about $7,500 each year. They’ve probably forgotten some costs along the way. I wonder if books and trips home are included? Why don’t we add another $1,500 a year just to be on the safe side.” John marked $9,000 on his sheet and multiplied by four. “Dad, the ‘Statistical Abstract’ showed that only 43% of the kids actually got their degree completed in four years.” John was generally pretty easy going, but he knew when he was being sand-bagged. “Well, guess what, son. You get to be one of the 43%!” Junior knew from past experience that now wasn’t the time to appeal that decision. “Hon, don’t forget to add the cost of lost wages. What did it say was the average earnings of a high school graduate?” Mary knew that their goal wasn’t to force their son to go to college. Rather she wanted to give his side of the argument every possible advantage so that he’d be convinced on his own. Junior gladly provided the data. “$23,365 was the median.” “Don’t you think that’s a little steep for someone fresh out of high school? How about we say $20,000 a year for the four years.” John totaled the figures. “That brings us to a total cost of $116,000 in expenses and lost income over the four years. What’s the difference in wages? How long would it take to earn it back?” Again they referred to Junior’s library notes. “The income difference is $19,957 per year. So if we divide the $116,000 by $19,957 it’s just under six years to earn the money back.” Sometimes John could be very quick with a calculator. Mary could see that her son had already done the math in his head by the expression he wore. “Junior, Dad and I aren’t going to force you to go to college. If you really don’t want to go, let’s talk about it. But that article you brought home said that the average college graduate would earn $600,000 more over their lifetime than the person who wasn’t a graduate. Despite the expense, college is still a good investment in your future.” Although still not convinced that he wanted to spend another four years in school, Junior had to acknowledge that there was a financial reward involved. Let’s see, maybe if he played his cards right he could get them to at least let him take an extended vacation before starting college.

Recommended Reading

: “Street Wise” is a great introduction to the world of stocks and bonds. I thought that I knew the basics of how “The Street” works, but I learned a great deal from this book. The list of web sites in the back is really useful, and the interviews with past and present teen investors are also interesting. The author writes clearly and doesn’t talk down to teens. She doesn’t promise that you’ll become a billionaire overnight, but she does a great job of explaining how to make smart decisions with your money. (courtesy: Amazon) Sign up forour weekly Frugal Mom Newsletter ! it’s free! Send any email to mailto:[email protected] orsign up on the left side of this article.

Jonni McCoy (9 Posts)


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Cindy Rowe is the owner/editor of Crazylou Creations blog. On the blog, you will find a little bit of crazy, and a whole lot of fun! As a FT working mother, she still finds time to create crafts, play around in the kitchen, plan parties and exercise. You'll find all of this and more on her blog!


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