Is Going To College Worth It?

[Tugg Speedman]

Below Peter Thiel and James Altucher argue that going to college is a waste of time and resources.  They argue that the current way college (and even education in general) is run is bloated inefficient and way to expensive.  They make arguments that most would be better off skipping college altogether and going straight into the work force.

Before you argue why they are wrong, see the two links, they address many of the common arguments.

I am very sympathetic to their arguments and at the very least the way college is structured, from its core curriculum to degrees offered to the costs need to change.  Many of the arguments Altucher lays out I agree with.

Thiel argues that colleges are run like a cartel, and like all cartels is makes the product worse.  This line of reasoning made sense to me ...

But Thiel’s issues with education run even deeper. He thinks it’s fundamentally wrong for a society to pin people’s best hope for a better life on  something that is by definition exclusionary. “If Harvard were really the best education, if it makes that much of a difference, why not franchise it so more people can attend? Why not create 100 Harvard affiliates?” he says. “It’s something about the scarcity and the status. In education your value depends on other people failing. Whenever Darwinism is invoked it’s usually a justification for doing something mean. It’s a way to ignore that people are falling through the cracks, because you pretend that if they could just go to Harvard, they’d be fine. Maybe that’s not true.”

So why doesn't Harvard use it $35 billion endowment to buy Marquette University (or fill in the blank) and rename it Harvard - Milwaukee?  Why don't they do this in 100 locations around the world?  Interesting question!


In addition to below, I have also argued that their is a coming collapse in college costs.  First the large endowment elite universities are going to cut their cost to zero (because they have the resources to do it) and they the next level of universities will be forced to compete and radically cut back their costs and so on.  While this sounds great to those of us that are parents, this will put enormous pressure on most universities because of lowered costs.  They will respond with cost cutting efforts (such as online classes) and the entire experience of college will change from what we currently know.

Love to hear your thoughts on this.



The Pros and Cons of Going To College
James Altucher
August 2015
http://www.jamesaltucher.com/2015/08/college-pros-cons/
I was at a dinner once. Someone who was working for Mayor Bloomberg asked me, “Would you let someone who didn’t go to college give you brain surgery?”

I said, “It’s not about me. Would you let your son who has no interest in being a doctor, go to four years of school and another years of medical school just so he can operate on my brain even though he hates every minute of it and gets a million dollars into debt?”

The average person has 14 different careers in their life. But now because of the costs and the debt, they are chained to that first career forever.

Make the choices that allow you to cast away the chains as quickly as possible.

Go to the COLLEGE OF YOU. It has one course: every day wake up and ask, how can I improve 1% over where I was yesterday in any area of my life?

You have a mission here. Fly out of the nest and accomplish it.


https://www.youtube.com/watch?v=-HM2Kp5Xj6s&app=desktop
Peter Thiel: U.S. College System as Corrupt as Church 500 Years Ago
<a href="http://www.youtube.com/v/-HM2Kp5Xj6s" target="_blank" rel="noopener noreferrer" class="bbc_link bbc_flash_disabled new_win">http://www.youtube.com/v/-HM2Kp5Xj6s</a>

Peter Thiel: We're in a Bubble and It's Not the Internet. It's Higher Education.
Posted Apr 10, 2011

https://techcrunch.com/2011/04/10/peter-thiel-were-in-a-bubble-and-its-not-the-internet-its-higher-education/

Instead, for Thiel, the bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.

Like any good bubble, this belief– while rooted in truth– gets pushed to unhealthy levels. Thiel talks about consumption masquerading as investment during the housing bubble, as people would take out speculative interest-only loans to get a bigger house with a pool and tell themselves they were being frugal and saving for retirement. Similarly, the idea that attending Harvard is all about learning? Yeah. No one pays a quarter of a million dollars just to read Chaucer. The implicit promise is that you work hard to get there, and then you are set for life.  It can lead to an unhealthy sense of entitlement. “It’s what you’ve been told all your life, and it’s how schools rationalize a quarter of a million dollars in debt,” Thiel says.

[GGGG]

http://www.usnews.com/news/articles/2014/02/11/study-income-gap-between-young-college-and-high-school-grads-widens

"Among millennials ages 25 to 32, median annual earnings for full-time working college-degree holders are $17,500 greater than for those with high school diplomas only. That gap steadily widened for each successive generation in the latter half of the 20th century. As of 1986, the gap for late baby boomers ages 25 to 32 was just more than $14,200, and for early boomers in 1979, it was far smaller at $9,690. The gap for millennials is also more than twice as large as it was for the silent generation in 1965, when the gap for that cohort was just under $7,500 (all figures are in 2012 dollars)."


Until this changes, people will continue to go to college.  Does this mean you *have* to go to college?  Nope.  Does it mean it's a golden ticket?  Nope.  But it means a lot.

[Tugg Speedman]

http://www.usnews.com/news/articles/2014/02/11/study-income-gap-between-young-college-and-high-school-grads-widens

"Among millennials ages 25 to 32, median annual earnings for full-time working college-degree holders are $17,500 greater than for those with high school diplomas only. That gap steadily widened for each successive generation in the latter half of the 20th century. As of 1986, the gap for late baby boomers ages 25 to 32 was just more than $14,200, and for early boomers in 1979, it was far smaller at $9,690. The gap for millennials is also more than twice as large as it was for the silent generation in 1965, when the gap for that cohort was just under $7,500 (all figures are in 2012 dollars)."


Until this changes, people will continue to go to college.  Does this mean you *have* to go to college?  Nope.  Does it mean it's a golden ticket?  Nope.  But it means a lot.

And if you net the extra pay against the expense of college, what is it the advantage?  And if you remove STEM degrees (Science,Technology,Engineering,Medicine) what is it?

Restated, if you're paying well in excess of $150k over four years for a non-STEM degree, what is the advantage?

[GGGG]

And if you net the extra pay against the expense of college, what is it the advantage?  And if you remove STEM degrees (Science,Technology,Engineering,Medicine) what is it?

Restated, if you're paying well in excess of $150k over four years for a non-STEM degree, what is the advantage?

I was a non-STEM, non business major, but there is no way I would be making my current income without a college degree.  Even if it cost me $150k, it would have been worth it.  Other people going to the same school, with the same major, are making less.  Some are making more.

Ultimately how far you advance depends on how smart and savvy you are, and on how hard you work.  However for most people, that is going to be capped at some point without the degree.  The problem is that it is hard to make that bet on someone's future when they are 18. 

That's why, if my kid is a marginal student, I am not looking at a private school degree without a bunch of aid of some sort. 

[jesmu84]

And if you net the extra pay against the expense of college, what is it the advantage?  And if you remove STEM degrees (Science,Technology,Engineering,Medicine) what is it?

Restated, if you're paying well in excess of $150k over four years for a non-STEM degree, what is the advantage?

The advantage is getting a job. Most jobs (outside of physical labor/industrial) won't hire without a degree.

Should it be that way? Debatable. But in our world, it is that way.

[muwarrior69]

And if you net the extra pay against the expense of college, what is it the advantage?  And if you remove STEM degrees (Science,Technology,Engineering,Medicine) what is it?

Restated, if you're paying well in excess of $150k over four years for a non-STEM degree, what is the advantage?

That is why I think it is wise to send your kids to community college which prepare you for the "real world job" then go to the 4 year school to take all the "academic mumbo jumbo courses" to get the BA or BS at half the cost.

[Tugg Speedman]

The advantage is getting a job. Most jobs (outside of physical labor/industrial) won't hire without a degree.

Should it be that way? Debatable. But in our world, it is that way.

James Altucher response to this ...

5) BOGUS INCOME STUDIES

Many universities, to tout their benefits, have done the exact same study: People who got a degree, 20 years later, have made up to $500,000, give or take, more in their career then people who didn’t have a degree.

This is a spurious study. It has no control group. It’s based on a demographic from the 1970s and 1980s when people from middle class families went to colleges and people from lower-class families, often didn’t.

This could be the entire reasons for the income difference but the studies don’t mention that.

Here’s a study: take everyone who got accepted to Harvard. Tell half of them you can’t go to college ever. Instead, get your four year head start on making money.

Then see who has more money 20 years later.

[Dr. Blackheart]

Is buying a house worth it? $350,000 with 10% down.  Have to pay mortgage and property and liability insurance. Large closing costs. Interest payments. Property taxes go up at a rate much higher than COLAs. Rehab and maintenance fees. Local assessments paid by home owners. Garbage, water, sewer bills. Multi-decade loans.  Property tax bills about 50%-60% of what rent might be. That is a lot of non-recoverable cost.

Historically, although not recently, constant appreciation, tax write offs, stability, freedom, roots, good schools. No constant moving costs.  Those are the pluses.

Is real estate a better investment than education from a $$ perspective? 

[Jay Bee]

HS seniors should just buy AAPL & chill out

[LAZER]

That is why I think it is wise to send your kids to community college which prepare you for the "real world job" then go to the 4 year school to take all the "academic mumbo jumbo courses" to get the BA or BS at half the cost.

What do you mean by "real world job"?

[Litehouse]

I don't get the Harvard-franchise argument.  Schools like Harvard aren't superior because they have a better model that can be scaled up.  They're superior because they have a concentration of the best professors and the best students.  Creating more Harvards would just dilute that advantage.  The scarcity of top level professors and fellow students is what makes it a better school.

[jesmu84]

James Altucher response to this ...

5) BOGUS INCOME STUDIES

Many universities, to tout their benefits, have done the exact same study: People who got a degree, 20 years later, have made up to $500,000, give or take, more in their career then people who didn’t have a degree.

This is a spurious study. It has no control group. It’s based on a demographic from the 1970s and 1980s when people from middle class families went to colleges and people from lower-class families, often didn’t.

This could be the entire reasons for the income difference but the studies don’t mention that.

Here’s a study: take everyone who got accepted to Harvard. Tell half of them you can’t go to college ever. Instead, get your four year head start on making money.

Then see who has more money 20 years later.

I'm not talking about income potential.

I'm talking about getting an interview. Or the listed requirements for a job. Many (most?) require a bachelor's to even be considered for the position.

[TAMU, Knower of Ball]

I have often wondered that if going to college is actually more important for learning "general life skills" like critical thinking, problem solving, organization, self motivation, teamwork, cultural competency, and self sufficiency. When I go home and interact with friends and relatives who didn't go to college, that is where I notice the biggest gap. They have just as much "technical" knowledge as my college educated peers but some of these other skills are noticeably lacking. Personally, I find these more important to career success than technical skills. When I'm hiring somebody, I require a baseline of technical knowledge but really I'm looking at how organized they are, if they can solve problems, if they can communicate well, and if they are internally motivated. I can teach anyone the technical aspects of my job, but I don't have the skillset to teach these other skills.

Is college the best way to learn them? Not sure. Its the best way that I know how to teach them. Is college too expensive? Absolutely.

I think skipping college and going straight into the work force is good for a select few highly performing people. Or for people who are going to end up in a specialized trade like plumbing or auto repair. But I think for most people entering academica and corporate America, college is the better option.

[buckchuckler]

Here’s a study: take everyone who got accepted to Harvard. Tell half of them you can’t go to college ever. Instead, get your four year head start on making money.

Then see who has more money 20 years later.

Isn't that fairly short sighted?  20 years would put you at what 38?  Still a lot of prime earning years ahead of you.  Years in which you would think the advantage in earning power would go to those that graduated, then again, maybe I only think that because I have been programmed to do so. 

The answer is of course, it depends.  For some (myself included) I would say it is definitely worth it.  For others, maybe not so much.  Each person has to make their own decision.

Some people don't need college.  Some are too brilliant for it, and it is a waste of time.  Others don't care for it or the end to which it leads.  For many, college represents an opportunity to get a better job and earn more, or have a better lifestyle, than they would have been able to do otherwise. 

[TAMU, Knower of Ball]

I'm not talking about income potential.

I'm talking about getting an interview. Or the listed requirements for a job. Many (most?) require a bachelor's to even be considered for the position.

This is true too. Right or wrong, more and more jobs are requiring college degrees. Besides administrative assistants, every position in my department requires at least a Bachelor's degree. You literally won't get an interview if you don't have one. No exceptions. Most positions are also Masters' recommended. You can get an interview if you don't have one but you realistically won't get the job without one. We have around 40 people (not including administrative assistants) in my department and I can only think of one person who doesn't have a Master's, and she worked as police officer for 6 or 7 years.

[GGGG]

This is true too. Right or wrong, more and more jobs are requiring college degrees. Besides administrative assistants, every position in my department requires at least a Bachelor's degree. You literally won't get an interview if you don't have one. No exceptions. Most positions are also Masters' recommended. You can get an interview if you don't have one but you realistically won't get the job without one. We have around 40 people (not including administrative assistants) in my department and I can only think of one person who doesn't have a Master's, and she worked as police officer for 6 or 7 years.

My WW2 era grandfather, without a college degree, worked his way up from being a clerk to being one of the top financial guys at a Fortune 500 company.  His job would likely not only require a college degree today, but an MBA as well.  He only retired about 35 years ago.

[Tugg Speedman]

So we are in agreement that after high school one must spend 4 years and more than six figures to get a job interview?

To make my position clear, I agree with you that college is a valuable thing for someone between 18 and 22.  But I agree with Thiel and Altucher that the way college is currently structured is all wrong.  Altucher and Thiel make the case for how to change it.

[forgetful]

So we are in agreement that after high school one must spend 4 years and more than six figures to get a job interview?

To make my position clear, I agree with you that college is a valuable thing for someone between 18 and 22.  But I agree with Thiel and Altucher that the way college is currently structured is all wrong.  Altucher and Thiel make the case for how to change it.

Thiel and Altucher don't know jack about education.  Their stance on the issue reflects a complete lack of understanding of the education industry.  Frankly, business leaders trying to enforce business ideals on education is what has led to the current problems in education.

Read the fall of the faculty, it highlights how the problem of education is business people thinking they know how to run education...and the increasing corporatization of higher ed.

[GGGG]

The idea that faculty would do better at running higher education is laughable.  Completely laughable.  The operating environment that exists today is NOTHING like the environment that existed a generation or two ago.

[forgetful]

The idea that faculty would do better at running higher education is laughable.  Completely laughable.  The operating environment that exists today is NOTHING like the environment that existed a generation or two ago.

Did I say the faculty would run it???  Pretty sure I said business people had no business running it/commenting on it. 

What I said was that the corporatization of education is the problem in education.  I'll stand by that, I have mountains of data/experience to support my stance.  I have yet to see an example where business people came in and fixed problems...they have only made problems worse.

Individuals that spent their entire career in academics moving up the ranks of faculty-administration-leadership are the ones that know the industry best and should be the ones running the industry. 

[Tugg Speedman]

Did I say the faculty would run it???  Pretty sure I said business people had no business running it/commenting on it. 

What I said was that the corporatization of education is the problem in education.  I'll stand by that, I have mountains of data/experience to support my stance.  I have yet to see an example where business people came in and fixed problems...they have only made problems worse.

Individuals that spent their entire career in academics moving up the ranks of faculty-administration-leadership are the ones that know the industry best and should be the ones running the industry.

Textbook thinking of everything that is wrong in higher education.  No need to respond because you are beyond reason on this.

Only hope is you remain a looney fringe thinker in this area that no one takes seriously.

[forgetful]

Textbook thinking of everything that is wrong in higher education.  No need to respond because you are beyond reason on this.

Only hope is you remain a looney fringe thinker in this area that no one takes seriously.

Have you ever worked with a consulting firm on this issue?  I have?  I know multiple people at both Bain and Mckinnsey that specialize in this area.  At one point McKinsey wanted to hire me to work as a consultant in this area.  They admit, that they misunderstood academia and misapplied business principles in this sector.

I'll stay out of stock valuations debate, not my area.  You stay out of academia, you know nothing of the ins and outs of this business, neither does Peter Thiel.

Stick to your area of expertise.

[TAMU, Knower of Ball]

I would agree academia could stand to be run more like a business. But I also think that if left to their own devices, business minded types would ruin academia. As with most things, its probably somewhere in the middle.

[Tugg Speedman]

I would agree academia could stand to be run more like a business. But I also think that if left to their own devices, business minded types would ruin academia. As with most things, its probably somewhere in the middle.

The only way you think this is you have a misunderstanding of what "business minded types" means.

Like everything else, their is a finite amount of resources.  Whether Government, business or academia  you cannot be everything to everyone.  Choices must be made, and metrics must be made to make sure the choices desired are met.

Academia has shown time and again that cannot make choices and cannot measure that they are meeting those objectives.  The simplest way to see this, of many, is the spiraling cost of education.   

That is what a "business minded type" brings to the table.  A way to control cost (aka, allocate resources) and meaure that those objectives are being met.

It does not mean some political agenda is at play, which is what I think you're implying when you say if taken too far it will ruin it.

[TAMU, Knower of Ball]

The only way you think this is you have a misunderstanding of what "business minded types" means.

Like everything else, their is a finite amount of resources.  Whether Government, business or academia  you cannot be everything to everyone.  Choices must be made, and metrics must be made to make sure the choices desired are met.

Academia has shown time and again that cannot make choices and cannot measure that they are meeting those objectives.  The simplest way to see this, of many, is the spiraling cost of education.   

That is what a "business minded type" brings to the table.  A way to control cost (aka, allocate resources) and meaure that those objectives are being met.

It does not mean some political agenda is at play, which is what I think you're implying when you say if taken too far it will ruin it.

No political agenda. Not what I meant. I have spoken with business minded types about the cost of higher education. They often have grand ideas about ways to lower the cost that in most cases I have no doubt would work to a degree. But what I have often found is that they don't understand what the product of higher education is. Many of them seem to think universities are selling a degree. We aren't. We are selling education. Education isn't often pretty or efficient. Making sure our customers receive a true education often means inconveniencing them and telling them things that they don't want to hear. Its a customer service nightmare. The old adage of "the customer is always right" is never true in higher education. This drives business types crazy. Sure we could offer all our classes on line and that would save money. But that cheapens the value of the product too much. Sure we could cut all the liberal arts departments and that would save money. But that cheapens the product too much. Sure we could cut all of student affairs and that would save money but that would cheapen the product too much.

I think academia needs to be run more like a business, but not at the expense of education. There is a happy middle, it just needs to be found. One area that sticks out to me is in building on campus. Too often I think universities build projects without proper sponsorship and in ways that are too costly or inefficient. That's why I think things like Innovation Alley at Marquette are a great idea. Fusing the best of business and academia together.

The franchise idea is an interesting one. Its not the first time I have heard it. I remember a conversation where someone suggested that the the top Jesuit schools buy out the struggling ones and make branch campuses. You could have Marquette - Saint Louis (SLU), Marquette - Denver (Regis), Marquette - New Orleans (Loyola). Different schools could specialize in different areas and students could switch between campuses between semesters for a more specialized experience. Like study abroad but domestic. I don't have the business acumen to understand how it would save money, but it certainly sounded cool!