A recent WSJ article profiled a Columbia, Ohio doctor facing a whopping $500,000 in student loans -- the result of deferred payments and accumulated charges. While the doctor's debt burden may be extreme, more U.S. college students are borrowing larger amounts to pay for surging tuition costs.
Rising debt is one key reason why our guest James Altucher, a hedge-fund manager and author, argues: Don't send your kids to college!
"There's a lot of evidence to suggest that motivated kids are going to make money whether or not they go to college," says Altucher, managing partner at Formula Capital. "So teach your kids how to be motivated. Teach your kids how to sell a product, build a network of connections. That's going to be far more valuable."
He notes for some people, it might be more enriching and productive to go to college later in life.
The case for college. Altucher adds the case for college largely is based on an assumption: a degree = a higher paying job. "Everyone who's hiring you has a college degree and that's a way they perpetuate the scam," Altucher tells Aaron in the accompanying clip. (Of course there are notable college dropouts, including Bill Gates, Steve Jobs and Mark Zuckerberg.)To be sure, college grads typically get higher paying jobs and are expected to earn $800,000 more over the course of a lifetime vs. workers who didn't go to college, according to CollegeBoard.
100K for a degree: But with four years of college costing $104,000 on average (including books and tuition) and the average college student graduating with $23,000 in debt, Altucher argues it's time to rethink the value of four years of higher education, especially right after high school. He believes the vast majority of HS grads would be better off if tuition money was invested for them instead, as detailed here, or used to fund a new business or other "educational" endeavors like travel.
Note, that $104,000 figure is just the average total cost -- and that's just for now. Faced with budget shortfalls, costs are surging, particularly at public schools, while degrees at top private colleges can cost upwards of $200,000.
Altucher notes the cost of college in the U.S. has risen 10 fold during the last 30 years, compared to a six-fold increase for health-care and three-fold for inflation overall. "College, not only is it a scam, but the college presidents know it. That's why they keep raising tuition greater than health care or inflation costs," he says.
From $1,620 to $10,000 in 20 years. University of California leaders in November voted to hike tuition for undergraduates by a whopping 32% or roughly $2,500. The total fee for undergraduates at campuses including UCLA and UC Berkeley will exceed $10,000 an academic year by fall 2010. That annual fee was just $1,620 in 1990, and about $3,830 in 2002. Not surprisingly the fee hikes have sparked protests and anger -- especially as the state's budget woes haven't stopped top UC officials from pocketing base salaries of about $400,000 annually.
Click on the video for Altucher's take on alternatives to college; and to embed and share the clip.
i am sorry but my child is a genius with electronics and knows more than the people that are working at most places, and knows more than college students. He is only 18 but no one will give him a chance because of his age. Who cares about the education listen to what the people know than the scores on what they do in school any one can cheat there way through. I have a kid who knows a more than most so called educated people and those people go to him to help when they cannot figure out stuff but keep going to him. These schools now don't care how to educate that is why these kids are bored in school and want to skip out. They can get there education looking on the internet than sitting 8 hours with teachers that don't care.
Yes , college is a scam!! I wished my parents would have spent that $ 150k on buying a house for me since that's the main burden we all strive to get & pay for ... Then let me choose a career I enjoyed without the constant worry about bills & that house payment!
It is absurd to generalize "worthless of college education" . There are plenty of choices in one's life. We tend to equate value to the amount of dollars. If that is the benchmark for education I would think America is deep trouble. His article is too general and misleading those who wish to pursue higher education. IF the argument is " expensive college education how do we cope with it? " then I understand. He talks like Mao in China in a sense.
I do agree with some part of this articles....... I do agree that the whole higher education system in America is becoming a business and a scam, but lets take a look at ideas behind this articles.
Problems with our higher education organizations are the facts that they are focused in providing a college experience not education... Majority of the freshmen in universities, have absolutely no idea why they are in college, or what they are going to do.... Universities are here to provide the "college experience" and not really much of a higher education. It is mind blowing the amount of money spent on luxury dorms and student centers (in billions) and how much improvement been done towards better learning and education. They keep cutting the professors salaries, and hire fresh-of-the-boat Indians and Chinese graduate students, that barely speak proper English to teach their classes. How is it possible to take a public communication course taught by a Chinese teacher that barely speaks English.... ?
I am all about education and learning; learning makes us realize our potentials and spark the hidden values in each and every one of us.......
as an old saying... If you want to learn, go to the library, if you want to get laid, go to college....
To say that "most" successful people have not gone to college is absolutely ridiculous. If you just walk down the street in a community that is considered at the very least "well-to-do" and poll the homeowners regarding their experiences, I would say over 90 percent of them are college grads. Now the issue that is prompting articles such as this one is the fact that "college" has become incredibly general. With the increasing number of colleges in the United States, more and more people can get "college" educations for less money and in less time than some of the competing Universities. These newer expanding schools are also often times easier than some of the reputable, and admittedly more expensive schools. Graduates from THESE schools may find themselves in a heap of trouble, as they find that their degree from University of Phoenix, or IIT, or some southwest Christian tech A & M school of Alabama barely separates them from a high school graduate. Another thing that prompts articles like this is examining exactly WHAT people end up doing with their lives. There are statistics that will say something like x% of students (being a low number) actually get a job in the field that they majored in. Yes, an English major will most likely not be a writer, and a Chemistry major probably not a chemist; but the skills obtained through the hard work and intuition that is necessary to graduate from a GOOD University will be invaluable in your pursuit of success.
To use Zuckerberg and Jobs as examples of success stories is insulting to the readers, or it should be at least. They have a collective IQ of about a zillion and they both found means of making stupid amounts of money on their own, which they probably could have done with absolutely no guidance, but that's not the rest of America. Thats like saying "don't go to college.....I mean....Kobe didn't.."
The best students don't go to school.
In real life, most successful people in life do not have a College Education, but not say that it's not important. I still think that we should encourage the young ones to pursue College Education, but not for the money part of it.
I think for most people the returns on the money spent on Collage Education is minimal, but there are those few career that one gets good returns on the investment. Things have changed a lot now, cause just because one has a Collage Education does mean that he/she will be successful.
There is NO DOUBT that college is a SCAM. I graduated from University of California at Irvine with a bachelors in Electical Engineering in 1987. From 1985 to 1987 my tuition was $460 a quarter. Now it is what? More than TEN TIMES that.
I was lucky to go to college when I did and I got a great education and career. But since then the greed and waste of the colleges has gone off the rails. It's beyond comprehension.
I don't know what the answer is, but its NOT a government problem, it's a COLLEGE GREED, WASTE and THEFT problem.
On t hing is for sure: NOBODY should spend their money for a college education unless it is a RIGOROUS PROFESSIONAL TECHNICAL degree leading to a high paying career, like engineering. The liberal arts simply aren't worth the money.
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